Loan Calculator Home Equity

Home Equity Loan Calculator

Estimate your potential home equity loan amount, monthly payment, total interest, total repayment, available equity and loan-to-value ratio with this free home equity loan calculator.

Enter Your Home & Loan Details

Enter your estimated home value, current mortgage balance, desired loan amount, interest rate and repayment term.

Enter your home’s estimated current market value.
Enter the amount you still owe on your existing mortgage.
Enter the amount you are considering borrowing.
Enter the estimated annual interest rate.
Longer terms generally reduce monthly payments but increase total interest.
Lenders set their own maximum loan-to-value requirements.
Optional estimate for application, appraisal, closing or other loan fees.
Optional. See how additional monthly payments could reduce interest.
How much equity do you have? Your home equity is generally the estimated current value of your home minus the balance owed on your mortgage and other liens.

Estimated Monthly Payment

$0
Estimated principal & interest payment
Home Equity $0
Maximum Potential Loan $0
Combined LTV 0%
Total Interest $0
Estimated available borrowing room

Based on the selected maximum combined LTV, you may have approximately $0 of additional borrowing capacity before reaching that LTV level.

Home Equity Loan Breakdown

Home value $0
Current mortgage balance $0
Existing home equity $0
New home equity loan $0
Interest rate 0%
Loan term 0 years
Total principal & interest $0
Estimated fees $0
Total estimated cash outlay $0

Estimated Amortization Summary

Year Starting Balance Principal Paid Interest Paid Ending Balance
Important: This calculator provides estimates for educational and planning purposes. Actual loan terms, interest rates, fees, maximum LTV limits, eligibility requirements and payments vary among lenders. A lender may also consider income, credit history, debt-to-income ratio, property type and other factors.

What Is a Home Equity Loan?

A home equity loan allows a homeowner to borrow against the equity they have built in their property. The home generally serves as collateral for the loan. Unlike a traditional mortgage used to purchase a home, a home equity loan is commonly used after the homeowner already owns the property and has accumulated equity.

Many home equity loans provide a lump sum that is repaid through scheduled monthly payments over a fixed period. The interest rate and repayment structure depend on the lender and the borrower’s financial profile.

How Does a Home Equity Loan Calculator Work?

This calculator uses your estimated home value and existing mortgage balance to estimate your current equity. It then considers the amount you want to borrow, interest rate and repayment term to calculate an estimated monthly principal and interest payment.

The calculator also estimates your combined loan-to-value ratio and compares your requested borrowing amount with the maximum borrowing amount associated with the LTV percentage you select.

How to Calculate Home Equity

A basic home equity calculation is straightforward:

Home Equity = Current Home Value − Mortgage Balance − Other Liens

For example, if a property is worth $400,000 and the homeowner owes $250,000, the estimated equity is $150,000 before considering any other liens or claims against the property.

How Much Home Equity Can I Borrow?

The amount you may be able to borrow depends on the lender’s requirements and the property’s value. One important measurement is the combined loan-to-value ratio, often abbreviated as CLTV.

A simplified calculation is:

Combined LTV = Total Debt Secured by the Home ÷ Home Value × 100

Lenders can establish their own maximum CLTV limits. Your actual borrowing capacity may also depend on your income, credit profile, existing debt and other underwriting requirements.

Home Equity Loan vs. Home Equity Line of Credit

Home Equity Loan

A home equity loan typically provides a lump sum that you repay according to an agreed schedule. This can make it easier to plan around a predictable loan balance and repayment schedule.

Home Equity Line of Credit

A home equity line of credit, commonly called a HELOC, generally provides a revolving credit line. You can typically borrow as needed up to the approved credit limit, subject to the terms of the lender and the agreement.

A home equity loan and a HELOC can have different rates, fees, repayment structures and risks. Compare the terms carefully before choosing either option.

What Affects a Home Equity Loan Payment?

  • Amount borrowed
  • Annual interest rate
  • Loan repayment term
  • Loan fees
  • Credit profile
  • Debt-to-income ratio
  • Home value
  • Existing mortgage balance
  • Maximum combined loan-to-value allowed by the lender

Does a Longer Home Equity Loan Term Lower the Payment?

A longer repayment term can reduce the required monthly principal and interest payment because the balance is spread across more monthly payments. However, extending the term can result in substantially more interest being paid over the life of the loan.

This is why it is useful to compare both monthly payment and total interest rather than choosing a loan based only on the smallest monthly payment.

Can Extra Payments Reduce Home Equity Loan Interest?

Extra principal payments can potentially reduce the time needed to repay a loan and reduce interest charged over the life of the loan. However, the exact effect depends on the loan agreement and how additional payments are applied.

Use the extra monthly payment field in this calculator to explore how paying more each month could change your estimated repayment period and interest cost.

What Are Home Equity Loans Commonly Used For?

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

Because the property can serve as collateral, homeowners should carefully consider the consequences of taking on additional secured debt.

Frequently Asked Questions

A home equity loan calculator estimates the potential loan payment, total interest, total repayment cost, home equity and borrowing capacity based on information you provide.
Subtract your outstanding mortgage balance and other secured liens from the current estimated value of your home. The result is your approximate home equity.
The amount depends on your home’s value, existing mortgage and other liens, the lender’s maximum combined loan-to-value requirement, and your financial qualifications.
Combined loan-to-value compares the total debt secured against a property with the property’s estimated value. It is commonly used by lenders when assessing home equity borrowing.
The monthly payment depends primarily on the amount borrowed, interest rate and repayment term. Enter those figures into the calculator above to estimate your principal and interest payment.
A home equity loan is generally additional debt secured by your home rather than a replacement for your existing mortgage. Your existing mortgage remains subject to its original terms unless you refinance or otherwise change it.
Neither option is automatically better. A home equity loan may suit someone seeking a lump sum and predictable repayment structure, while a HELOC may be useful for someone who wants access to a revolving credit line. Compare the rates, fees, repayment terms and risks.
Homeowners may use home equity financing for renovations and other major expenses, subject to lender requirements and the terms of the loan.
Credit history can be one factor lenders consider when determining eligibility and loan terms. Lenders may also consider income, existing debts, property value and other financial information.
Yes. A home equity loan is debt that must be repaid according to its loan agreement. Missing payments can have serious financial consequences because the loan is generally secured by the property.

Disclaimer: This calculator is for educational and planning purposes only. It does not constitute financial, tax, legal or investment advice and does not represent an offer or commitment to lend. Actual rates, fees, eligibility, loan limits, payment amounts and terms vary by lender and borrower. Consult a qualified financial professional or lender before making important borrowing decisions.