Line of credit rate stress test.

Method and limitations

Formulas: rate = index + margin. Monthly interest = balance × rate ÷ 12. Payment = monthly interest, or monthly interest plus your chosen percent of today's balance. Payment shock is the scenario payment minus the baseline payment; extra annual interest is 12 × the change in monthly interest.

Worked example: $100,000 at index 5% plus margin 1% is 6%, so interest-only is $500.00 a month ($6,000 a year). With the index up 2 points the rate is 8%, the payment is $666.67 (+$166.67, +33.3%) and annual interest is $8,000 (+$2,000).

What this is not: the scenarios are what-if steps you choose, not forecasts, and the tool supplies no rates. Real lenders usually charge interest daily, may reset the rate on their own schedule, and may cap or floor it, so your statement will differ. The balance is held constant, so this does not model paydown or new draws.

Sources: the Consumer Financial Protection Bureau says HELOCs usually have a variable interest rate, so payments may change from month to month (consumerfinance.gov). The Financial Consumer Agency of Canada says most HELOCs have a variable rate, that the lender may change it at any time, and that paying only the interest will not pay off the loan (canada.ca). Both pages checked 2026-09-30. This is not the qualifying-rate test used for Canadian mortgages; see the mortgage stress test for that.