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Knowledge Base Article

Interest Only HELOC FAQs

Interest Only Home Equity Line of Credit FAQs

An interest only loan may be appropriate if you want a low payment and the flexibility to pay principal at your convenience.

Is there a minimum amount required on the first advance from the Interest Only HELOC?

There is no minimum amount required for your first advance.

Is there a prepayment penalty for the Interest Only HELOC?

No. You can make any additional payment to the principal payments or pay the loan off at any time.

What is the draw period for the Interest Only HELOC?

The initial draw period is 5 years. At our option, we may renew or extend the draw period. After the draw period ends, the repayment will begin. The length of the repayment period will depend upon the balance at the time of the last advance you obtain before the draw period ends but will never be longer than 15 years.

How is the monthly payment calculated for the Interest Only HELOC?

You will use the loan balance, times interest rate, divided by 365 days, times number of days in the month (28, 30 or 31).

Ex: $100,000 x 6%* / 365 x 30 days + $493.15 *Interest rate applicable for given month

If the interest rate increases, you will be required to make more payments until the end of the repayment period. The minimum payment may not repay the outstanding balance by the end of the repayment period. You will then be required to make a single balloon payment at the maturity.

What is the minimum monthly payment for the Interest Only HELOC?

The minimum payment is the greater of $100.00 or the accrued interest.

When is the payment due for my Interest Only HELOC?

The due date will always be on the 16th of each month.

What are the interest rates for the Interest Only Home Equity Line of Credit?

Contact a Home Loan Specialist to discuss interest rates for an Interest Only Home Equity Line of Credit.  

Can I convert my existing HELOC loan to an Interest Only HELOC?

An existing HELOC cannot be converted to an Interest Only HELOC. To discuss other options, please contact Residential Lending Services within Online Banking from the Secure Email under Additional Services.