What Happens When Your HELOC Matures: Prepare for the Payment Shock

Here's a surprise many HELOC borrowers aren't ready for: When your HELOC matures, your payment can jump 30% to 90%.

That's not a typo. The comfortable interest-only payments you've been making during the draw period? They're about to change dramatically.

Here's exactly what happens when your HELOC matures—and the five options you have to prepare.

Understanding the HELOC Timeline

Most HELOCs have two distinct phases:

The Draw Period (Years 1-10)

• Duration: Typically 5-10 years
• Access: You can borrow up to your credit limit
• Payments: Usually interest-only
• The trap: Low payments feel manageable, but you're not paying down principal

The Repayment Period (Years 11-30)

• Duration: Typically 10-20 years
• Access: Line is frozen—no more draws
• Payments: Principal + interest (fully amortizing)
• The shock: Payments jump significantly

Full Maturity

At the end of the repayment period, any remaining balance is due in full. Most people pay off before this point, but it's worth understanding.

The Payment Shock: Real Numbers

Let's see what happens to a $50,000 HELOC balance at 7.5% interest:

The math is brutal:

• 10-year draw to 20-year repayment: 29% payment increase
• 10-year draw to 10-year repayment: 91% payment increase

If your repayment period is shorter, the jump is steeper.

Why This Catches People Off Guard

During the draw period, many people:

• Only make minimum (interest-only) payments
• Draw more as they pay down, keeping balance high
• Don't track when the draw period ends
• Assume payments will stay roughly the same

When repayment hits, the budget they built around $312/month suddenly needs to find an extra $90-$280.

What Actually Changes When the Draw Period Ends

Three things happen simultaneously:

1. You Can No Longer Draw Funds

The credit line freezes. Whatever balance you have is what you're paying off. No more treating it like a revolving credit card.

2. Payments Start Including Principal

During draw period, your payment only covered interest—you weren't paying down the debt. Now every payment chips away at the principal. That's good for your equity, but hard on your budget.

3. Your Rate May Change

Some HELOCs convert to a fixed rate when entering repayment. Others stay variable. Check your terms—knowing what to expect helps you plan.

Your 5 Options at HELOC Maturity

Option 1: Enter Repayment Phase (Do Nothing)

Accept the higher payment and pay off the balance over the repayment period.

Good if:

• You can afford the higher payment
• You want to be debt-free on schedule
• No better alternatives available

Watch out for:

• Budget stress from payment increase
• Total interest paid over repayment period

Option 2: Refinance Into a New HELOC

Start fresh with a new HELOC that has its own draw period.

Good if:

• You still want access to home equity
• You can requalify based on current income/credit/equity
• Your financial situation is stable

How it works:

• Apply for new HELOC before current one matures
• New HELOC pays off old balance
• You get a fresh draw period (another 5-10 years)
• Back to interest-only payments

Watch out for:

• You're not paying down principal (just deferring)
• You need to qualify again (credit check, income verification)
• Closing costs on new HELOC

Option 3: Convert to a Fixed-Rate Home Equity Loan

Some lenders let you convert your HELOC balance to a fixed-rate home equity loan.

Good if:

• You want predictable payments
• You're worried about rate increases
• Your balance is stable (not planning to borrow more)

Watch out for:

• May have higher rate than variable HELOC
• Lose flexibility of revolving credit

Option 4: Cash-Out Refinance of Your First Mortgage

Roll your HELOC into your primary mortgage with a cash-out refinance.

Good if:

• Primary mortgage rates are attractive
• You want one simple payment
• HELOC balance is significant

How it works:

• Get new first mortgage for current balance + HELOC payoff
• HELOC is paid off and closed
• One mortgage payment going forward

Watch out for:

• Closing costs can be significant (2-5% of loan amount)
• Extends your mortgage timeline
• Rate may be higher than your existing first mortgage

Option 5: Pay Off the Entire Balance

Use savings, investments, or a windfall to pay off the HELOC completely.

Good if:

• You have liquid assets available
• You want to eliminate the debt entirely
• You don't need continued access to home equity

Benefits:

• No more HELOC payment
• Full home equity restored
• Simplifies your financial life

How to Prepare Before Your HELOC Matures

Start planning 6-12 months before your draw period ends:

Find Your Maturity Date

Check your monthly statement or original loan documents. Call your lender if you can't find it.

Calculate Your Future Payment

Use an online loan calculator with:

• Current balance
• Interest rate
• Repayment period length

See exactly what you'll owe.

Build a Buffer Now

Start setting aside the difference between your current payment and projected future payment. You'll have savings ready when payments increase.

Explore Your Options Early

If you're considering refinancing, start shopping 6+ months ahead. Don't wait until the deadline.

Consider Partial Paydown

Reducing your balance before repayment starts means lower monthly payments. Even paying down $5,000-$10,000 can make a noticeable difference.

Warning: The Balloon Payment Scenario

Some older HELOCs (and a few newer ones) require the full balance paid at maturity—not monthly payments, but everything at once.

This is called a balloon payment, and it's a worst-case scenario if you're not prepared.

How to check:

• Review your loan agreement for "balloon payment" or "balance due at maturity"
• Call your lender and ask directly

If you have a balloon payment due:

• Start refinancing NOW
• Don't wait—this isn't optional

The Bottom Line

Your HELOC's draw period ending isn't a crisis—but it requires preparation. The comfortable interest-only payments are going away, and what replaces them depends on your choices.

Know when your draw period ends. Calculate your future payment. Decide which option fits your situation. Act early.

At HonestCasa, we help homeowners navigate HELOC maturity—whether that's refinancing to a new line or finding another solution. Explore your options →

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FAQ

Can I renew my HELOC instead of entering repayment?

Some lenders allow you to refinance into a new HELOC with a fresh draw period. This isn't automatic—you'll need to reapply and qualify again. Start the process before your current draw period ends.

Will my rate change when my HELOC matures?

It depends on your loan terms. Some HELOCs keep the variable rate through repayment. Others convert to a fixed rate. Check your agreement or ask your lender.

How do I find my HELOC maturity date?

Check your monthly statement, original loan documents, or call your lender directly. Most HELOCs are 10+20 (10-year draw, 20-year repayment) or similar structures.

Can I make extra payments during the draw period?

Yes! Paying more than the minimum during the draw period reduces your balance and your future repayment payments. This is one of the smartest moves you can make.

What if I can't afford the repayment phase payments?

Explore refinancing options as soon as possible. A new HELOC, home equity loan, or cash-out refinance might give you more manageable terms. Don't wait until you're already struggling.