Question:

# What is the annual percentage rate table for monthly payment plans used for?

An annual percentage rate table for monthly payment plans shows how much your monthly payment will change during the years of the loan. The APR on a payment plan may or may not coincide with the effective annual rate.

Use the annual percentage rate table on a home equity line of credit to see how your monthly payments may change in the future.

APR tables for home equity lines (HELOC) are useful when you are comparing your payments.

Consider a \$10,000 7-year Interest Only HELOC with a balloon payment at the end of the last year. HELOC APR usually coincides with the nominal rate, as fees for small HELOC amounts are negligible and do not change the APR of the loan significantly. For a \$30K or \$50K HELOC the APR may be larger than the effective rate.

The annual percentage rate (APR) table for HELOC monthly payment plans for five years is given below. The monthly payment is the minimum interest only payment due, and varies throughout the year, even though the table shows it as a constant. HELOCs carry adjustable rates that vary throughout the year.

This is a sample table only. Your annual percentage rate table for monthly payment on a home equity loan (HEL), or a line of credit (HELOC) will show different figures and may be more detailed. Bear in mind that this is an interest only 7-year HELOC with a balloon payment due at the end of the loan term.

Your own HELOC may be structured in a different way (say, 10 years draw period and 10 years to repay it), may have different margin and APR values, and interest may be required to pay only on the credit advance that you have used.

Year Index the HELOC is based on
(%)
Margin (margins vary greatly by lenders)
(%)
Annual Percentage Rate (equal to the EAR - effective annual rate in this case)
(%)
Minimum Monthly Payment
(\$)
1996 6.000 1.000 7.000 58.34
1997 8.500 1.000 9.500 79.16
1998 6.000 1.000 7.000 58.34
1999 6.000 1.000 7.000 58.34
2000 8.250 1.000 9.250 77.07
2001 8.500 1.000 9.500 79.16
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