How To Determine End Value And Time Frame Of An Interest Only Home Equity Line Of Credit

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Topic Author
Holt1960
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Joined: Sat Feb 10, 2024 5:18 pm

How To Determine End Value And Time Frame Of An Interest Only Home Equity Line Of Credit

Post by Holt1960 »

Hello Folks - Grasping at straws here but thought perhaps someone might beable to figure out. I will try to lay it out as basically as possible.
I currently have a $205,000 Home Equity Line Of Credit at 5% per annumwith the only requirement being that interest must be paid on amonthy basis on the outstanding balance with no principal necessary to be repaid until all funds have run out , necessitating sale ofhouse to repay the $205,000 in full). There is currently a zero balance.

My intention is to pull, from the line of credit, $1000 per month plus whatever interest dollar amount I have accumulated the previous month on the overall oustanding balance / principal.

My question being, at what point will the whole available balance become zero and how much will I have fully realized / netted of the$205,000 along the lines of how much principal will I have obtained over the term and how much interest will I have paid? Trying to figure out how many months / years I can pull from the line of credit before I have to sell my house to pay off the line of credit.

Thanks for your help!
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#Cruncher
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Re: How To Determine End Value And Time Frame Of An Interest Only Home Equity Line Of Credit

Post by #Cruncher »

Holt1960 wrote: Sat Feb 10, 2024 5:21 pmI currently have a $205,000 Home Equity Line Of Credit at 5% per annum with the only requirement being that interest must be paid on a [monthly] basis on the outstanding balance with no principal necessary to be repaid until all funds have run out ... My intention is to pull, from the line of credit, $1000 per month plus whatever interest dollar amount I have accumulated the previous month on the overall [outstanding] balance ... at what point will the whole available balance become zero and how much will I have fully ... netted of the $205,000 ... and how much interest will I have paid? Trying to figure out how many months / years I can pull from the line of credit ...
We can use the Excel NPER function to calculate how many months it would take $1,000 per month to grow to $205,000 at an annual rate of 5%. The answer is about 148 months. The table below shows the calculation. To make the illustration neater, I've reduced the amount from $205K to $204,088.75. This makes the answer come out to a whole number of months as shown on row 5. Interest is about $56K with a net withdrawal of $148K. Rows 7-28 show a partial monthly breakdown.

Code: Select all

Row      Col A       Col B        Col C    Formula in Column B        Formula in Column C
  2       Rate        5.0%
  3    Balance  204,088.75
  4  Per month    1,000.00
  5     Months         148                =NPER(B2/12,-B4,0,B3,0)    
  6   Interest   56,088.75                =B3-B4*B5                  
  7      Month    Interest      Balance

Code: Select all

  8          0                     0.00
  9          1        0.00     1,000.00   =C8*(B$2/12)               =C8+B$4+B9
 10          2        4.17     2,004.17    | | |                      | | |
 11          3        8.35     3,012.52    | | |                      | | |
 12          4       12.55     4,025.07    | | |                      | | |
 13          5       16.77     5,041.84    | | |                      | | |
 14          6       21.01     6,062.85    | | |                      | | |
 15          7       25.26     7,088.11    | | |                      | | |
 16          8       29.53     8,117.64    | | |                      | | |
 17          9       33.82     9,151.47    v v v                      v v v
 18         10       38.13    10,189.60   =C17*(B$2/12)              =C17+B$4+B18
...
 19        140   49,369.94   189,559.53   =C19-A19*B$4-SUM(B$8:B18)  =FV(B$2/12,A19,-B$4,0,0)
 20        141      789.83   191,349.37   =C19*(B$2/12)              =C19+B$4+B20
 21        142      797.29   193,146.65    | | |                      | | |
 22        143      804.78   194,951.43    | | |                      | | |
 23        144      812.30   196,763.73    | | |                      | | |
 24        145      819.85   198,583.58    | | |                      | | |
 25        146      827.43   200,411.01    | | |                      | | |
 26        147      835.05   202,246.06    v v v                      v v v
 27        148      842.69   204,088.75   =C26*(B$2/12)              =C26+B$4+B27
 28        Sum   56,088.75                =SUM(B9:B27)
Topic Author
Holt1960
Posts: 2
Joined: Sat Feb 10, 2024 5:18 pm

Re: How To Determine End Value And Time Frame Of An Interest Only Home Equity Line Of Credit

Post by Holt1960 »

Thank you so much for this! Way, way over my head but exactly the info I needed! Much Appreciated!
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