The following information is provided for general informational purposes only and it is based on terms of Interest Only Home Equity Line of Credit (HELOC) made January 12, 2015, or later. Your loan agreement will contain the specific terms of your loan. In the event of any discrepancies between this information and your loan agreement, the terms of your loan agreement will govern.
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by the equity in your home. This loan allows you to have a revolving source of funds that you can access as needed. 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 paying off the balance early on an Interest Only HELOC?
No, you may pay the loan off at any time.
Can I make additional payments to principal?
Yes, additional principal payments can be made once the interest has been satisfied for the current billing cycle. The billing cycle is the previous calendar month for payments due on the 16th.
What is the draw period for the Interest Only HELOC?
- For Loans opened after May 18, 2021:
- The draw period is 10 years followed by a 10-year repayment period. The total loan term is 20 years maximum.
- For Loans opened between January 12, 2015 and May 18, 2021:
- The draw period is 5 years followed by a 15-year repayment period. The total loan term is 20 years maximum. Additionally, some loans opened between January 12, 2015 and May 18, 2021 may have been modified to extend the draw period from 5 years to 10 years, thus shortening the repayment period.
How is the monthly payment calculated for the Interest Only HELOC?
During the Advance Period your minimum monthly payment will equal the greater of the interest finance charges that have accrued during the billing cycle or $100. If the full amount owed (outstanding balance plus interest) is less than $100, your minimum monthly payment will be the full amount owed. You can calculate this amount each time the loan balances changes in a billing cycle using the loan balance, times interest rate, divided by 365 days, times number of days in the month (28, 30 or 31).
For example: $100,000 x 6%* / 365 x 30 days = $493.15
*Interest rate applicable for given month
During the Repayment Period, your minimum monthly payment will equal the balance outstanding at the end of the month amortized over the remaining term of the loan. If the interest rate changes during the repayment period, then the minimum payment will change accordingly. For loans opened on or after 5/18/2021, if the amortized payment is less than $100, your minimum monthly payment will be $100. Repayment for loans originated January 12, 2015 and May 18, 2021, do not have a minimum payment during the repayment period.
Additional amounts such as past due payments, fees and over limit amounts may increase this payment amount.
What is the minimum monthly payment for the Interest Only HELOC?
- For Loans opened between January 12, 2015 and May 18, 2021:
- The minimum payment during the advance period is the greater of $100.00 or the accrued interest. Loans opened between January 12, 2015 and May 18, 2021 do not have a minimum payment during the repayment period.
- For Loans opened on or after May 18, 2021:
- The minimum payment during the advance period is the greater of $100.00 or the accrued interest. The minimum payment during the repayment period is the greater of $100.00 or the amortized loan payment.
When is the payment due for my Interest Only HELOC?
The due date will always be the 16th of each month. Because interest on an interest only HELOC is calculated at the end of the month, your minimum payment amount is determined after your statemen is generated. Payments made before the minimum payment has been calculated are applied to principal and do not satisfy the upcoming due date.
What are the interest rates for the Interest Only Home Equity Line of Credit?
Contact a member of our Home Loan Team 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 Contact Member Care link in the top right-hand corner.
