Home Equity Loan Calculator
See how much you may be able to borrow against your home, and estimate the monthly payment and interest on a fixed-rate home equity loan.
Results
| Item | Value |
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Payment by loan term
| Term | Monthly payment | Total interest |
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Quick Answer
Home equity is your home’s value minus what you owe. Lenders often let you borrow up to a combined loan-to-value of about 80% to 85%. With a $400,000 home and a $220,000 mortgage, 80% allows up to $100,000.00. A $50,000 loan at 8.25% for 15 years costs about $485.07 a month.
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Table of Contents
- Home Equity Loan Calculator
- Quick Answer
- Related Calculators
- How This Home Equity Loan Calculator Works
- How to Use the Home Equity Loan Calculator
- Core Formulas
- Key Terms
- Worked Example
- Real-Life Examples
- Home Equity Loan vs HELOC
- Payment per $10,000 Borrowed
- What Lenders Look At
- Common Mistakes to Avoid
- Frequently Asked Questions
- References & Sources
How This Home Equity Loan Calculator Works
Enter your home’s value, what you still owe on your mortgage, and your lender’s maximum combined loan-to-value (CLTV). The calculator works out your equity and the most you may be able to borrow. Enter the amount you want, the rate and the term to see the monthly payment, total interest and how much equity you keep.
Quick explanation: a home equity loan is a second mortgage paid out as a lump sum, with a fixed rate and fixed payments.
- Equity: home value − mortgage balance.
- Borrowing limit: set by your lender as a share of the home’s value.
- Security: your home backs the loan.
How to Use the Home Equity Loan Calculator
- Enter your home’s current value and your mortgage balance.
- Enter your lender’s maximum combined loan-to-value, often 80% to 85%.
- Enter the amount you want to borrow, or leave it blank to see the maximum.
- Enter the interest rate and choose a term.
- Press Calculate and compare payments for each term.
Core Formulas
- Equity: home value − mortgage balance
- Maximum loan: home value × max CLTV − mortgage balance
- CLTV: (mortgage balance + new loan) ÷ home value
- Monthly payment: L × r ÷ (1 − (1 + r)^−n)
L is the loan amount, r is the monthly rate (annual rate ÷ 12) and n is the number of monthly payments.
Key Terms
- Home equity: the part of your home’s value you own, after subtracting what you owe.
- Combined loan-to-value (CLTV): all loans on the home divided by its value.
- Second mortgage: a loan secured by your home behind your main mortgage.
- Appraisal: a professional estimate of a home’s market value.
- Closing costs: fees paid to get the loan, such as appraisal and origination fees.
Worked Example
Your home is worth $300,000 and you owe $150,000. Your lender allows 85% CLTV, and you want $40,000 at 7.75% for 10 years.
- Maximum loan = $300,000 × 0.85 − $150,000 = $105,000.00
- Monthly payment on $40,000 = $480.04
- CLTV after the loan = 63.3%
Real-Life Examples
- A kitchen remodel: $50,000 at 8.25% for 15 years is about $485.07 a month, with $37,312.63 of total interest.
- A shorter term: the same $50,000 over 10 years is about $613.26 a month, but saves interest.
- Checking your limit: a $500,000 home with a $380,000 mortgage at 85% CLTV allows up to $45,000.00.
- Paying off cards: a fixed rate may beat credit card rates, but the debt becomes secured by your home.
Home Equity Loan vs HELOC
- Home equity loan: one lump sum, usually a fixed rate and equal monthly payments.
- HELOC: a credit line you draw from as needed, usually with a variable rate and interest-only payments during the draw period.
- Which to pick: a loan suits one known cost. A HELOC suits costs spread over time. Try our HELOC Calculator to compare.
Payment per $10,000 Borrowed
| Rate | 5 years | 10 years | 15 years | 20 years |
|---|---|---|---|---|
| 6% | $193.33 | $111.02 | $84.39 | $71.64 |
| 7% | $198.01 | $116.11 | $89.88 | $77.53 |
| 8% | $202.76 | $121.33 | $95.57 | $83.64 |
| 9% | $207.58 | $126.68 | $101.43 | $89.97 |
| 10% | $212.47 | $132.15 | $107.46 | $96.50 |
What Lenders Look At
- Equity: how much of your home you own outright.
- Credit score: better scores usually get lower rates.
- Debt-to-income ratio: your total monthly debts compared with your income.
- Appraisal: the lender checks the home’s value, which may differ from your estimate.
Common Mistakes to Avoid
- Overestimating your home’s value. The lender’s appraisal decides it.
- Ignoring closing costs. Fees can add 2% to 5% of the loan amount.
- Borrowing the maximum. Leave equity in case home prices fall.
- Using it for everyday spending. Your home is at risk if you cannot repay.
- Comparing payments only. A longer term has a lower payment but more total interest.
Frequently Asked Questions
Often up to 80% to 85% of your home’s value, minus what you owe. Your lender sets the exact limit.
Like a regular fixed-rate loan, from the amount, rate and term. This calculator does it for you.
Usually yes, according to the CFPB. HELOCs usually have variable rates.
Commonly 5 to 30 years. Shorter terms cost less interest.
It can be when the money is used to buy, build or substantially improve the home that secures the loan. Ask a tax professional.
It varies by lender. Higher scores usually get lower rates.
Often yes, such as appraisal, origination and title fees. Ask each lender for a Loan Estimate.
Yes. Your home secures the loan, so the lender can foreclose if you do not repay.
Lower is safer. Many lenders cap it at about 80% to 85%.
A home equity loan keeps your first mortgage. A cash-out refinance replaces it with a larger one, which may make sense if you can also get a lower rate.
It often takes a few weeks because of the appraisal and paperwork.
Usually yes, but check the loan terms for any prepayment penalty.
References & Sources
| Source | Used For | Link |
|---|---|---|
| Consumer Financial Protection Bureau, What is a home equity loan? | How home equity loans work and their risks. | https://www.consumerfinance.gov/ask-cfpb/what-is-a-home-equity-loan-en-106/ |
| Federal Trade Commission, Home equity loans and home equity lines of credit | Loans vs lines of credit, and borrowing limits. | https://consumer.ftc.gov/articles/home-equity-loans-and-home-equity-lines-credit |