How much does a $125,000 HELOC cost monthly in 2025?

Many of today’s homeowners have a substantial amount of home equity — $313,000 on average, according to the March ICE Mortgage Monitor report. With so much value built up in their homes, homeowners looking to tap into that equity might consider a product such as a home equity line of credit (HELOC). 

HELOCs are second mortgages that offer access to your home’s equity through a revolving line of credit. Lenders typically give you up to 10 years to access your line of credit (“draw period“). After the draw period, your repayment period kicks in, and, in most cases, you’ll make monthly payments toward your principal and interest for up to 20 years. 

So, if you’re looking for access to a six-figure sum of money — say, $125,000 — a HELOC is an option. But, as with all big financial decisions, it’s important to ask questions before you get started. For example, how much would it cost monthly to have a $125,000 HELOC? Below, we’ll crunch the monthly payments.

See how much you could borrow with a HELOC now.

How much does a $125,000 HELOC cost monthly in 2025?

Your lender will calculate your HELOC monthly payment based on a variable interest rate. A variable rate can change every month based on market conditions and the overall interest rate climate. If interest rates rise, then your HELOC rate might rise, and vice versa. Here’s how much a $125,000 HELOC monthly payment would be using today’s average rate (assuming rates remain the same): 

• 10-year HELOC at 8.12%: $1,524.53
• 15-year HELOC at 8.12%: $1,203.24

Because HELOC rates are variable, it helps to know what your monthly cost would look like if rates went down or up. Here’s what your monthly payment would be for a $125,000 HELOC if rates fell 0.5% (assuming rates remain the same over the full repayment period):

• 10-year HELOC at 7.62%: $1,491.61
• 15-year HELOC at 7.62%: $1,167.31

If rates increased by 0.5%, here’s what your monthly payment for a $125,000 HELOC would look like (again, assuming rates remain the same for the full repayment period): 

• 10-year HELOC at 8.62%: $1,557.86
• 15-year HELOC at 8.62%: $1,239.73

See what HELOC interest rate you could qualify for here.

What to know about opening a HELOC

A HELOC functions differently than the two other main home-equity lending products: home equity loans and cash-out refinances. Here are three things to know about HELOCs specifically:

HELOCs have a variable interest rate

It’s worth mentioning again that lenders use a variable interest rate to calculate your monthly HELOC payments. Keep this in mind as you make your monthly budget — your rate could rise or fall from month to month. 

“The biggest surprise that homeowners encounter when they get a HELOC is the interest rate is most often variable which means the monthly payment can change based on the current market conditions,” says Linda Garcia, a mortgage broker and founder of Mortgages By Linda. “If the interest rates rise the homeowner may find that the higher monthly payment is more difficult to pay each month.”

That being said, HELOC rates are now at their lowest point in two years and are currently lower than home equity loan rates. 

You don’t have to use your HELOC funds

After you open a HELOC, you aren’t required to withdraw from it. So, if your financial needs change and you don’t need to make withdrawals from your HELOC, you don’t have to. Home equity loans, on the other hand, give you your funding upfront and all at once. 

You can make interest-only payments during your drawing period

Generally speaking, lenders allow you to make interest-only payments on what you borrow during your draw period, which is the amount of time (typically up to 10 years) that you can withdraw funds from your HELOC. It’s important to remember that interest payments only cover the interest your lender has charged, not your principal. 

The bottom line

HELOCs offer borrowers flexible access to their home equity. You don’t have to use your line of credit and, if you do, you typically make interest-only payments during your draw period. Understanding a HELOC’s payment structure is critical as you set your budget for a HELOC’s monthly cost. If you don’t make your monthly payments, you could lose your home since it’s used as collateral.

About The Author

Stephen Collopy

See author's posts