HELOC Draw vs. Repay in California: What Your Payment Will Do

HELOC Draw vs. Repay in California: What Your Payment Will Do

Most California HELOCs start with a draw period (interest-only) followed by a repayment period (principal + interest). That shift can double your payment if you’re not prepared.

Typical California HELOC Structure

• Draw: 5–10 years (interest-only)
• Repay: 10–20 years (fully amortized)

Why Payments Change So Much

During draw, you only pay interest on what you use. Once repayment begins, the remaining balance is amortized—so the payment jumps.

How to Plan Before You Open the Line

1. Model the payment at the repayment phase using today’s rate plus a cushion.
2. Consider paying extra during draw to reduce the balance before repayment.
3. Ask about fixed-rate conversion options for stable payments.

California Tip

If you’re using a HELOC for renovation or consolidation, plan the payoff timeline before the draw ends. That avoids unexpected payment spikes.

A HELOC can be flexible, but only if you understand when and how the payment changes.