Home Equity Loan Calculator Free

Free Home Equity Loan Calculator

Calculate your estimated home equity loan payment, available equity, maximum borrowing amount, combined loan-to-value ratio, total interest, total repayment and amortization schedule with this free online calculator.

Enter Your Home Information

Start with your current home value and existing mortgage balance.

Enter your best estimate of your home’s current value.
Enter the amount still owed on your existing mortgage.
Include other loans or liens secured against the property.
This is a planning assumption. Individual lenders may use different limits.
Home equity formula: Home equity is generally your current home value minus your mortgage balance and other liens secured by the property.

Enter Your Home Equity Loan Details

Add the amount you want to borrow and the estimated loan terms.

Enter the amount you are considering borrowing.
Enter the estimated annual fixed interest rate.
Choose how long you expect to repay the loan.
Optional estimate for appraisal, closing and other loan fees.

Extra Payment Scenario

See how additional monthly payments could change the estimated loan payoff.

Optional amount you plan to pay above the scheduled payment.

Estimated Monthly Payment

$0
Estimated principal and interest
Current Home Equity $0
Maximum Potential Loan $0
Combined LTV 0%
Total Interest $0
Estimated borrowing room

Based on your selected maximum combined LTV, the estimated amount of additional borrowing room remaining after your requested loan is $0.

Home Equity Loan Summary

Current home value $0
Current mortgage balance $0
Other home-secured debt $0
Current home equity $0
Requested home equity loan $0
Interest rate 0%
Loan term 0 years
Total principal paid $0
Total interest paid $0
Estimated loan fees $0
Total estimated repayment + fees $0

Standard Payment

Monthly principal & interest: $0

Estimated payoff: 0 years

Estimated interest: $0

With Extra Monthly Payment

Monthly principal & interest: $0

Estimated payoff: 0 years

Potential interest difference: $0

Yearly Amortization Schedule

Year Starting Balance Principal Paid Interest Paid Ending Balance
Important: This calculator is an educational planning tool. Actual home equity loan rates, fees, maximum LTV limits, eligibility requirements, payment amounts and terms vary by lender and borrower. Your home may serve as collateral for the loan, so consider the risks carefully before borrowing.

What Is a Home Equity Loan?

A home equity loan is a type of borrowing that allows a homeowner to use accumulated equity in their property as collateral. The homeowner generally receives a lump sum and repays the borrowed amount according to the loan’s terms.

The amount available can depend on the home’s current value, the existing mortgage balance, other liens, lender requirements and the homeowner’s financial qualifications.

How Does a Home Equity Loan Calculator Work?

A home equity loan calculator starts with the estimated current value of the property and subtracts existing mortgage debt and other secured debt to estimate available equity. It can then calculate an estimated payment based on the requested loan amount, interest rate and repayment term.

This calculator also estimates combined loan-to-value, maximum potential borrowing based on a selected LTV assumption, total interest and the effect of an optional extra monthly payment.

How to Calculate Home Equity

Home Equity = Home Value − Mortgage Balance − Other Liens

For example, if a home is worth $400,000 and the outstanding mortgage is $250,000, the estimated equity before considering other liens is $150,000.

Remember that an estimate of equity is not necessarily the same as the amount a lender will allow you to borrow.

How Much Can I Borrow With a Home Equity Loan?

The maximum amount you may be able to borrow depends on the lender’s requirements. One commonly considered factor is the combined loan-to-value ratio, or CLTV.

CLTV = Total Debt Secured by the Home ÷ Home Value × 100

A lender may establish a maximum CLTV and may also evaluate your income, credit history, existing debt, property value and other factors.

What Is the Difference Between Home Equity and Home Value?

Home value is an estimate of what the property is worth. Home equity represents the portion of that value that is not covered by mortgage and other secured debt.

For example, a $500,000 property with $300,000 of secured debt has approximately $200,000 of equity before considering other factors.

Home Equity Loan vs. HELOC

Home Equity Loan

A home equity loan generally provides a lump sum. The borrower then makes scheduled payments according to the loan agreement.

HELOC

A home equity line of credit, or HELOC, generally provides a revolving line of credit. The borrower can typically access funds up to an approved limit according to the lender’s terms.

The two products can have different interest-rate structures, fees, repayment periods and risks. Compare the terms carefully rather than choosing based only on the initial payment.

What Affects a Home Equity Loan Payment?

  • Amount borrowed
  • Interest rate
  • Repayment term
  • Loan fees
  • Home value
  • Existing mortgage balance
  • Other liens
  • Combined loan-to-value ratio
  • Credit profile
  • Income and debt obligations

Does a Longer Home Equity Loan Term Reduce the Payment?

A longer repayment term can reduce the required monthly principal and interest payment because the loan is spread across more months. However, a longer term can also result in more total interest over the life of the loan.

That is why comparing both the monthly payment and total interest is important when evaluating different loan terms.

Can Extra Payments Save Money on a Home Equity Loan?

Additional payments toward principal can reduce the outstanding loan balance faster. If interest is calculated using the outstanding balance, reducing that balance sooner can potentially reduce future interest.

The exact effect depends on the loan agreement. Check whether your lender has restrictions, fees or other rules concerning additional payments.

What Can a Home Equity Loan Be Used For?

Homeowners may consider home equity financing for major expenses such as home improvements, renovations, repairs, education expenses or debt consolidation. The appropriate use depends on the borrower’s financial situation and the terms available.

Since the property can serve as collateral, homeowners should carefully evaluate their ability to make the required payments before taking on additional secured debt.

Frequently Asked Questions

A free home equity loan calculator estimates your available equity, potential borrowing amount, monthly payment, combined loan-to-value ratio, total interest and repayment cost based on the information you enter.
Subtract your outstanding mortgage balance and other secured liens from your home’s estimated current value. The remaining amount is your approximate home equity.
Your potential borrowing amount depends on your home’s value, existing debt, the lender’s maximum combined loan-to-value requirement and your financial qualifications.
CLTV stands for combined loan-to-value ratio. It compares the total debt secured against a property with the property’s estimated value.
The monthly payment depends primarily on the amount borrowed, interest rate and repayment term. Use the calculator above to estimate the principal and interest payment for your loan scenario.
A home equity loan is generally additional debt secured by your property. Your existing mortgage normally continues according to its original terms unless you refinance or otherwise modify it.
No. A home equity loan generally provides a lump sum, while a HELOC generally provides a revolving credit line. Their rates, fees and repayment structures can also differ.
Homeowners may use home equity financing for renovations and improvements, subject to lender requirements and the terms of the loan.
A longer repayment term can lower the scheduled monthly principal and interest payment, but it can increase the total amount of interest paid over the life of the loan.
Extra principal payments can potentially reduce the outstanding balance faster and therefore reduce future interest. The exact result depends on the loan terms and how your lender applies additional payments.
Home equity is generally based on the current value of the entire property minus secured debt. The valuation used by a lender can differ from an individual’s estimate of the property’s value.
A home equity loan can involve significant risk because the property may serve as collateral. Failure to meet the loan obligations can have serious financial consequences. Carefully review the loan terms and your ability to repay before borrowing.

Disclaimer: This free home equity loan calculator is provided for educational and planning purposes only. It is not a lending offer, financial recommendation, legal advice, tax advice or guarantee of actual loan terms. Actual interest rates, fees, eligibility requirements, maximum CLTV, payments and borrowing limits vary by lender and borrower.