Home Equity Loan Calculator
Enter your home value, mortgage balance and the loan you want. See the most you could likely borrow, your fixed monthly payment, and the true cost including fees.
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EstimateThis calculator provides estimates for educational and informational purposes only. It does not constitute financial, investment, legal, accounting, or tax advice. Results are based on the assumptions and information entered and may differ materially from actual outcomes. Tax rules and financial regulations can change. Consult an appropriately qualified professional for advice specific to your situation.
This calculator provides estimates and is not a loan offer.
- Finds the borrowing limit from your combined loan-to-value (CLTV) cap, typically 80% to 85%.
- Calculates the fixed payment, total interest and total cost over the life of the loan.
- Shows the effective rate once closing costs are taken into account.
- Shows your combined loan-to-value before and after the loan.
How to use this calculator
Enter the current market value of your home and the balance on your mortgage, then the amount you want to borrow, the interest rate and the term. Open Advanced to change the maximum CLTV and the closing cost percentage.
How the borrowing limit works
Maximum total debt = home value x maximum CLTV Most you could borrow = maximum total debt - current mortgage balance Combined LTV = (mortgage balance + new loan) / home value
Most lenders cap the combined balance of all loans against the home at 80% to 85% of its value. Your credit score, income and debt-to-income ratio then decide whether you are approved for that amount.
A worked example
A home worth $450,000 with a $240,000 mortgage has $210,000 of equity. With an 85% CLTV cap, the maximum total debt is $382,500, so you could borrow about $142,500. Borrow $50,000 at 8.25% over 15 years and the payment is about $485 a month. Total interest is $37,313, and with $1,000 of closing costs the effective rate is 8.59%.
Home equity loan, HELOC or cash-out refinance
A home equity loan is a second mortgage with a fixed rate and a fixed payment, paid out as a lump sum. A HELOC is a revolving line with a variable rate. A cash-out refinance replaces your first mortgage. A home equity loan makes sense if you want one payout, a predictable payment, and you want to keep a low rate on your first mortgage. See our HELOC and cash-out refinance calculators for the alternatives.
The risk
Your home secures the loan. If you cannot repay, the lender can foreclose. Borrowing against equity also lowers the cushion if home prices fall. Use it for things that build value or solve a real need, and keep the payment within your budget.
Assumptions and limitations
- Fixed rate and payment. The loan is fully amortizing.
- CLTV cap. Individual lenders set their own.
- Tax deductibility. Interest may be deductible only when the money is used to buy, build or substantially improve the home that secures the loan. Ask a tax professional.
- Closing costs are estimated as a percentage of the loan.
Common mistakes
Using a stale home value. Lenders rely on an appraisal.
Borrowing the maximum. A smaller loan lowers both the payment and the risk.
Ignoring fees. They raise the real cost of borrowing.
Frequently asked questions
Usually up to 80% to 85% of your home's value, minus what you owe on your mortgage. On a $450,000 home with a $240,000 mortgage and an 85% cap, that is about $142,500.
The total of all loans secured by the home divided by its value. Lenders cap it to keep a margin of equity.
Only if you use the money to buy, build or substantially improve the home that secures it, and within IRS limits. Check with a tax professional.
A home equity loan gives you a lump sum with a fixed rate and payment. A HELOC is a revolving credit line with a variable rate.
Often. They commonly run 2% to 5% of the loan, and some lenders waive them. The calculator lets you change the percentage.
Most lenders want a score in the mid-600s or higher, and the best rates go to scores above 700.