🏡 Home Equity Loan Calculator: Payment and Borrowing Power
By Shihab Mia · Updated 2026-07-27
This home equity loan calculator gives an estimate for education and planning only and is not financial, lending, or tax advice. Your real loan amount, rate, payment, and closing costs depend on your lender, credit, income, debt-to-income ratio, and a property appraisal, so confirm every figure with a licensed lender before borrowing.
Your equity
Your loan
Defaults to your available equity. Edit to borrow less.
This home equity loan calculator shows two things at once: how much equity you can borrow as a lump sum, and what the fixed monthly payment would be. Enter your home value, your current mortgage balance, and the maximum combined loan-to-value your lender allows, and it returns the equity available to you. It then uses your chosen loan amount, interest rate, and term to calculate the monthly payment, the total of all payments, and the total interest you would pay.
What is the Home Equity Loan Calculator?
A home equity loan is a lump-sum second mortgage. You borrow a fixed amount against the equity in your home, receive it all at once, and pay it back in equal monthly installments at a fixed interest rate over a set term, usually 5 to 30 years. Unlike a line of credit, there is no draw period and no re-borrowing: the balance only goes down. This home equity loan calculator mirrors exactly that structure so the payment you see is the payment you would actually make.
The first job of the calculator is to size how much you can borrow. Lenders cap your total secured debt at a combined loan-to-value ratio (CLTV), commonly 80% to 90% of the appraised value. The tool multiplies your home value by that percentage, subtracts the balance still owed on your first mortgage, and shows the remainder as your available equity. If your mortgage already exceeds the allowed share of value, the available amount is simply zero, because there is no room left to lend against.
The second job is the payment itself. A home equity loan is fully amortized, so every payment covers both interest and principal and the loan reaches a zero balance on the final payment. The home equity loan calculator uses the standard amortization formula, dividing the annual rate by twelve to get a monthly rate and spreading the loan across the number of months in your term. Because the rate is fixed, the payment never changes, which makes a home equity loan easier to budget than a variable-rate line of credit.
Seeing the total of payments and the total interest next to the monthly figure is what makes this home equity loan calculator genuinely useful. A longer term lowers the monthly payment but raises the total interest, sometimes sharply. A slightly higher rate can add thousands over the life of the loan. By adjusting the amount, rate, and term, you can find a payment you can afford without quietly overpaying in interest, and you can compare a home equity loan against a cash-out refinance or a line of credit on equal terms.
Qualifying for a home equity loan takes more than available equity on paper. Lenders also weigh your credit score, your debt-to-income ratio, and how much equity you keep in reserve after the new loan closes, commonly 15% to 20%. A credit score in the high 600s or better and a debt-to-income ratio under roughly 43% to 50%, including the new payment, are typical requirements, though every lender sets its own thresholds. On top of the loan itself, expect closing costs for the appraisal, title search, origination, and recording, often 2% to 5% of the loan amount, which this calculator does not fold into the monthly payment, so budget for them separately.
A home equity loan is not the only way to tap equity, and it is worth comparing before you commit. A HELOC suits ongoing or uncertain expenses because you draw only what you need and pay interest on that balance, at the cost of a variable rate that can rise. A cash-out refinance replaces your entire first mortgage with one larger loan, which can make sense if current mortgage rates are near or below your existing rate, but it resets amortization and charges closing costs on the whole new balance, not just the cash you take out. Because a home equity loan is secured by your house, missing payments puts your home at risk of foreclosure exactly as with a first mortgage, so borrow only what fits your budget even if income or expenses change later.
When to use it
- Finding how much of your home equity you can actually borrow as a lump sum before you apply.
- Calculating the fixed monthly payment on a home equity loan for a renovation, debt consolidation, or a large one-time expense.
- Comparing the total interest cost of a 10, 15, or 20 year term so a lower payment does not hide a much larger lifetime cost.
- Checking how a rate quote from one lender compares with another on the same loan amount and term.
- Deciding between a fixed home equity loan and a variable HELOC by putting the monthly payments side by side.
- Confirming that a new second mortgage keeps your combined loan-to-value inside the limit your lender will accept.
How to use the Home Equity Loan Calculator
- Enter your current home value from a recent appraisal or a conservative estimate, and the balance still owed on your first mortgage.
- Set the maximum combined loan-to-value your lender allows. 85% is a common default; some lenders allow 80% or 90%.
- Read the available equity, then enter the loan amount you actually want to borrow (it starts equal to your available equity).
- Type the fixed interest rate (APR) the lender quoted and the loan term in years.
- Review the monthly payment, total of payments, and total interest, and adjust the amount, rate, or term until the payment fits your budget.
- Set aside an extra 2% to 5% of the loan amount for closing costs, since the calculator prices the loan payment only, not the fees to originate it.
Formula & method
Worked examples
Your home is worth $450,000, you owe $250,000 on the first mortgage, and the lender allows a maximum 85% combined loan-to-value.
- Maximum total secured debt = 450,000 × 0.85 = 382,500
- Subtract the existing mortgage = 382,500 − 250,000 = 132,500
- The result is positive, so it becomes your available equity to borrow
Result: Available equity = $132,500
You borrow the full $132,500 as a fixed home equity loan at 7.5% APR over a 15 year term.
- Monthly rate r = 7.5 ÷ 100 ÷ 12 = 0.00625
- Number of payments n = 15 × 12 = 180
- Payment = 132,500 × 0.00625 ÷ (1 − 1.00625<sup>−180</sup>) = 1,228.29
- Total of payments = 1,228.29 × 180 = 221,092
- Total interest = 221,092 − 132,500 = 88,592
Result: Monthly payment about $1,228.29, total interest about $88,592
A different homeowner has a $300,000 home and still owes $270,000 on the first mortgage, with the same 85% max CLTV.
- Maximum total secured debt = 300,000 × 0.85 = 255,000
- Subtract the existing mortgage = 255,000 − 270,000 = −15,000
- The result is negative, so available equity is capped at zero by the max(0, ...) rule
Result: Available equity = $0, no home equity loan is possible until the mortgage balance drops or the home value rises
Available equity on a $450,000 home with a $250,000 mortgage, by max CLTV
| Max CLTV | Allowed secured debt | Less mortgage | Available equity |
|---|---|---|---|
| 80% | $360,000 | $360,000 − $250,000 | $110,000 |
| 85% | $382,500 | $382,500 − $250,000 | $132,500 |
| 90% | $405,000 | $405,000 − $250,000 | $155,000 |
| 95% | $427,500 | $427,500 − $250,000 | $177,500 |
Monthly payment per $100,000 borrowed on a 15 year fixed home equity loan
| APR | Monthly payment | Total interest (15 yr) |
|---|---|---|
| 6.0% | $843.86 | $51,894 |
| 6.5% | $871.11 | $56,799 |
| 7.0% | $898.83 | $61,789 |
| 7.5% | $927.01 | $66,862 |
| 8.0% | $955.65 | $72,017 |
| 8.5% | $984.74 | $77,253 |
Typical home equity loan closing costs by loan amount (2% to 5% of the loan)
| Loan amount | Low estimate (2%) | High estimate (5%) |
|---|---|---|
| $50,000 | $1,000 | $2,500 |
| $100,000 | $2,000 | $5,000 |
| $132,500 | $2,650 | $6,625 |
| $200,000 | $4,000 | $10,000 |
Common mistakes to avoid
- Choosing the longest term just to lower the payment. Stretching a home equity loan from 15 to 30 years cuts the monthly payment, but on $100,000 at 7.5% it raises total interest from about $66,862 to about $151,717. Pick the shortest term whose payment you can comfortably afford.
- Forgetting the first mortgage counts against your limit. A home equity loan is capped by combined loan-to-value, so the lender adds your existing mortgage to the new loan. If the mortgage already uses most of the allowed share of value, your available equity can be small or zero.
- Confusing a home equity loan with a HELOC. A home equity loan is a fixed-rate lump sum with a steady payment from day one. A HELOC is a variable-rate revolving line with a low interest-only phase that later jumps. Do not assume the low HELOC payment applies here.
- Using an optimistic home value. Available equity depends entirely on the appraised value, and the lender orders its own appraisal. Guessing high inflates the amount you think you can borrow, so plan with a conservative, recent estimate.
- Forgetting closing costs when budgeting the loan. This calculator prices the monthly payment on the loan amount alone, but lenders also charge appraisal, origination, title, and recording fees, typically 2% to 5% of the loan. A $132,500 loan can carry $2,650 to $6,625 in upfront costs you need cash for at closing.
- Comparing only the interest rate, not the full APR and fees. A lower advertised rate can still cost more once origination fees or a higher closing cost percentage are added. Ask every lender for the annual percentage rate (APR), which folds in fees, so you compare loans on equal footing rather than the headline rate alone.
Glossary
- Home equity loan
- A lump-sum second mortgage borrowed against your equity at a fixed rate and repaid in equal monthly installments over a set term.
- Home equity
- The portion of your home you own outright, equal to the current value minus the balance owed on all loans secured by it.
- Combined loan-to-value (CLTV)
- The total of every loan secured by the home divided by its value, shown as a percent. Lenders cap a home equity loan by this ratio.
- Amortization
- Repaying a loan through fixed periodic payments that cover both interest and principal so the balance reaches zero on the final payment.
- Principal
- The amount you actually borrow, before interest. Each payment reduces the principal until the loan is fully repaid.
- APR
- The annual percentage rate, the yearly cost of borrowing including certain fees. Divided by twelve it gives the monthly rate used in the payment formula.
- Debt-to-income ratio (DTI)
- Your total monthly debt payments, including the new loan, divided by your gross monthly income. Lenders usually cap this near 43% to 50% for approval.
- Closing costs
- Upfront fees to originate the loan, such as appraisal, origination, title search, and recording fees, typically 2% to 5% of the loan amount and paid separately from the monthly payment.
Frequently asked questions
How much can I borrow with a home equity loan?
Multiply your home value by the lender maximum combined loan-to-value (commonly 80% to 90%), then subtract your current mortgage balance. For a $450,000 home at 85% CLTV with a $250,000 mortgage, that is 382,500 minus 250,000 = $132,500 of available equity. If the result is negative, you have no borrowable equity.
How is a home equity loan payment calculated?
A home equity loan is fully amortized, so the fixed monthly payment is P times r divided by (1 minus (1 + r) to the power minus n), where P is the loan amount, r is the APR divided by 1,200, and n is the term in years times 12. For $132,500 at 7.5% over 15 years the payment is about $1,228.29 per month.
What is the difference between a home equity loan and a HELOC?
A home equity loan gives you a fixed lump sum with a fixed rate and a steady payment from the first month. A HELOC is a revolving line with a variable rate, a draw period where you can borrow and repay, and a low interest-only payment that later jumps. A home equity loan is easier to budget; a HELOC is more flexible.
What is a good term for a home equity loan?
Shorter terms cost far less in total interest but carry a higher monthly payment. On $100,000 at 7.5%, a 15 year term pays about $66,862 in interest versus roughly $151,717 over 30 years. Choose the shortest term whose monthly payment still fits comfortably in your budget.
Is the interest rate on a home equity loan fixed?
Yes. Most home equity loans carry a fixed interest rate, so the monthly payment stays the same for the entire term. This is a key difference from a HELOC, which usually has a variable rate that can raise your payment over time.
Is home equity loan interest tax deductible?
Interest may be deductible only when the loan is used to buy, build, or substantially improve the home that secures it, and total mortgage debt stays under IRS limits. Interest on money used for other purposes, such as paying off cards, generally is not deductible. Confirm your situation with the IRS guidance or a tax professional.
What credit score do I need for a home equity loan?
Most lenders want a credit score in the high 600s or better for the best rates, and some set a minimum around the low 600s. Along with credit score, lenders check your debt-to-income ratio and how much equity remains after the new loan, so a strong application usually needs all three to line up.
How much are closing costs on a home equity loan?
Closing costs typically run 2% to 5% of the loan amount, covering the appraisal, origination fee, title search, and recording fees. On a $132,500 loan that is roughly $2,650 to $6,625 due at closing, separate from the monthly payment this calculator shows.
Is a home equity loan or a cash-out refinance better?
A home equity loan adds a second, separate loan on top of your existing mortgage, which keeps your original mortgage rate untouched. A cash-out refinance replaces the whole first mortgage with a new, larger one. A cash-out refinance can be cheaper if today's rates are near or below your current rate; otherwise a home equity loan usually preserves a better first-mortgage rate.
What happens if I cannot repay a home equity loan?
A home equity loan is secured by your home, so missed payments can lead to late fees, damage to your credit, and ultimately foreclosure, just as with a first mortgage. Only borrow an amount whose payment you can sustain even if your income or expenses change.
Sources
- What is a home equity loan? , Consumer Financial Protection Bureau
- Home Equity Loan: A Simplified Guide to Borrowing Against Your Home Equity , Investopedia
- Home Equity Loan Rates: Compare Top Lenders , NerdWallet