Interest-Only vs. Amortizing HELOC Payments
Whether your HELOC requires principal repayment during the draw period is one of the most important structural differences between programs. It directly affects your required monthly payment.
Interest-Only During Draw
With an interest-only HELOC, your required payment during the draw period covers only the interest on your outstanding balance. You are not required to pay down principal — though you can. Programs: NFTYDoor (3-year draw), REMN HELIX (5-year draw), Deephaven (5-year draw).
Amortizing From Day One
With a fully amortizing HELOC, your required payment includes both principal and interest from the first payment. You are paying down the balance immediately. Programs: Aven (5-year draw), Figure (3–5 year draw depending on term).
Why This Matters
An amortizing HELOC can have a significantly higher required payment than an interest-only HELOC at the same rate and balance — because principal is being repaid immediately. This affects your debt-to-income ratio during underwriting and your actual monthly cash flow. A borrower qualifying at the edge of DTI limits may qualify more easily under an interest-only program.
Illustrative Example
Balance
$100,000
Interest-Only Payment
~$667/month
Amortizing Payment
~$1,028/month (30-year) or ~$1,213/month (20-year)
This is a mathematical illustration only. Actual payments depend on the program's rate, term, and balance.
HELOC guidelines change frequently. This content is educational and is not a loan approval, commitment or guarantee.