Home Equity Loan Calculator
Find out how much equity you can borrow and what your monthly payments will be. Get a professional PDF report instantly.
ℹ️ How to Use the Home Equity Loan Calculator
Step 1
Enter your home's current market value. This is your best estimate of what your home would sell for today — not the original purchase price.
Step 2
Enter your current mortgage balance — the amount you still owe on your primary mortgage. The calculator uses this to determine your available equity.
Step 3
Enter the loan amount you want to borrow, the interest rate offered by your lender, and your desired loan term. Home equity loan terms typically range from 5 to 30 years.
Step 4
Click Calculate to see your monthly payment, total interest cost, and complete amortization schedule. Download the free PDF report to share with your lender or financial advisor.
Example Calculation
Scenario: A homeowner has a home valued at $500,000 with a remaining mortgage balance of $300,000. They borrow $80,000 as a home equity loan at 8.5% interest over 10 years.
- Available Equity: $200,000 (40% of home value)
- Loan Amount: $80,000
- Interest Rate: 8.5%
- Loan Term: 10 years (120 months)
- Monthly Payment: $991.18
- Total Amount Paid: $118,941.60
- Total Interest Paid: $38,941.60
- LTV after loan: 76% (mortgage $300,000 + HELOAN $80,000 divided by $500,000)
Frequently Asked Questions
❓What is a home equity loan?
A home equity loan lets you borrow against the equity in your home — the difference between your home's market value and your outstanding mortgage balance. It is a second mortgage paid as a lump sum with fixed monthly payments over a set term. Unlike a HELOC which is a revolving line of credit a home equity loan has a fixed interest rate and fixed monthly payment making budgeting predictable.
❓How much can I borrow with a home equity loan?
Most lenders allow you to borrow up to 80% to 85% of your home's appraised value minus your existing mortgage balance. For example if your home is worth $500,000 and you owe $300,000 your available equity is $200,000. At an 80% combined loan-to-value limit you could borrow up to $100,000 ($500,000 times 0.80 minus $300,000). Your credit score income and debt-to-income ratio also affect how much you qualify for.
❓What is the difference between a home equity loan and a HELOC?
A home equity loan gives you a lump sum at a fixed interest rate with equal monthly payments over the loan term — similar to a second mortgage. A HELOC (Home Equity Line of Credit) works like a credit card where you draw funds as needed up to a limit during the draw period. Home equity loans are better for large one-time expenses while HELOCs suit ongoing expenses where you need flexible access to funds over time.
❓Are home equity loan interest rates tax deductible?
Home equity loan interest may be tax deductible if the loan proceeds are used to buy build or substantially improve your home. The IRS requires that the funds be used for qualified home improvement purposes — using the loan for personal expenses like paying off credit cards or taking a vacation does not qualify. The deduction is subject to limits based on combined mortgage debt. Always consult a tax professional for advice specific to your situation.
❓What are the risks of a home equity loan?
The primary risk is that your home serves as collateral — if you cannot make payments you could lose your home to foreclosure. Home equity loans also increase your total debt and monthly obligations. If home values decline you could end up owing more than your home is worth. Carefully consider whether the purpose of the loan such as home improvement debt consolidation or education justifies putting your home at risk and whether you can comfortably afford the monthly payments long term.
This home equity loan calculator provides estimates for informational purposes only. Results are based on the inputs provided and assume a fixed interest rate for the full loan term. Actual loan terms payment amounts and available equity will vary based on your credit score lender requirements current home value and outstanding mortgage balance. Home equity loans use your home as collateral — failure to repay may result in foreclosure. This calculator does not constitute financial or lending advice. Always consult a licensed mortgage professional lender or financial advisor before taking out a home equity loan.