Introduction
A home equity loan lets you borrow money using the value you have built up in your home. The difference between what your home is worth and what you still owe on your mortgage is called equity. This calculator helps you figure out how much equity you have, how much you could borrow, and what your monthly payments would be.
You can enter your home value, mortgage balance, interest rate, and loan term to get results right away. The tool shows your monthly payment, total interest cost, and a full amortization schedule that breaks down every payment into principal and interest. You can also compare up to three different loan scenarios side by side to find the option that saves you the most money.
Whether you want to pay for home repairs, cover a big expense, or consolidate debt, this equity loan calculator gives you clear numbers so you can make a smart choice before you talk to a lender.
How to Use Our Equity Loan Calculator
Enter details about your home, mortgage, and desired loan to see how much equity you can borrow, what your monthly payment will be, and how different loan options compare side by side.
Current Home Appraised Value: Type in what your home is worth today. This is the market value or the amount from a recent appraisal. If you are not sure of your current equity position, try our home equity calculator for a quick estimate.
Outstanding Mortgage Balance: Enter how much you still owe on your current mortgage. If your home is fully paid off, type 0. You can use a mortgage calculator to review the details of your existing loan.
Lender LTV Limit: Pick the maximum loan-to-value ratio your lender allows. Most lenders cap this at 80%, but some go higher or lower. Our LTV calculator can help you understand this ratio in more detail.
Credit Score Range: Select the range that matches your credit score. A higher score may qualify you for a lower interest rate.
Loan Amount: This auto-fills with your maximum borrowable amount. You can change it to any amount you want to borrow.
Annual Interest Rate (%): This auto-fills based on your credit score. You can change it to match a rate quoted by your lender. Use our interest rate calculator to explore how different rates affect your costs.
Loan Term (years): Enter how many years you want to repay the loan. Common terms are 10, 15, 20, or 30 years.
Payment Type: Choose Standard for payments that pay down your balance each month. Choose Interest-Only if you only want to pay interest, with the full balance due at the end. Our interest only calculator goes deeper into how these payments work.
Include Closing Costs: Check this box if you want to factor in closing costs. This unlocks three extra fields below.
Closing Cost Amount: Enter your closing costs as a dollar amount or a percentage, depending on the format you pick. If you need help estimating these fees, try our closing cost calculator.
Cost Entry Format: Choose whether you are entering your closing costs as a flat dollar amount or as a percentage of the loan.
How Costs Are Handled: Select Paid Upfront if you will pay closing costs out of pocket. Select Deducted from Proceeds if the lender will subtract them from the money you receive.
Scenario Comparison (A, B, and C): Fill in a loan amount, interest rate, term, and payment type for up to three different loan options. The calculator will show them side by side and mark the one that costs the least in total interest as the best value.
What Is a Home Equity Loan?
A home equity loan lets you borrow money using your home as backing. Your home equity is the part of your home you truly own — it is the difference between what your home is worth and what you still owe on your mortgage. For example, if your home is worth $400,000 and you owe $250,000, you have $150,000 in equity.
With a home equity loan, a lender gives you a lump sum of cash based on a portion of that equity. You then pay it back in fixed monthly payments over a set number of years, just like a regular loan. The interest rate is usually fixed, which means your payment stays the same each month. A home equity loan differs from a HELOC, which works more like a revolving line of credit with a variable rate.
How Much Can You Borrow?
Most lenders will not let you borrow all of your equity. They set a loan-to-value (LTV) limit, which is usually between 75% and 85% of your home's value. The lender takes your home's appraised value, multiplies it by the LTV limit, and then subtracts what you still owe on your mortgage. The result is the most you can borrow.
Your credit score also plays a big role. A higher credit score usually means a lower interest rate, which saves you money over time. A lower credit score may still qualify, but the rate will likely be higher. Lenders also look at your debt-to-income ratio to make sure you can afford the new payment alongside your existing obligations. If you are still early in the homebuying process, our home affordability calculator can help you understand how much house you can handle.
Standard Payments vs. Interest-Only Payments
A standard payment covers both interest and a piece of the loan balance each month. Over time, your balance shrinks until it reaches zero. An interest-only payment only covers the interest charge. Your balance does not go down at all, and the full amount you borrowed is still due at the end of the loan term — similar to a balloon payment. Interest-only loans have lower monthly payments, but they cost more in total interest and carry more risk.
What Are Closing Costs?
When you take out a home equity loan, you may have to pay closing costs. These are fees for things like the appraisal, title search, and loan processing. Closing costs are often between 2% and 5% of the loan amount. You can pay them out of pocket upfront, or some lenders will subtract them from the money they give you. When closing costs are included, lenders show an APR (Annual Percentage Rate), which combines the interest rate and the fees into one number so you can see the true yearly cost of borrowing.
Why Compare Loan Scenarios?
Changing the loan term, interest rate, or loan amount can make a big difference in what you pay. A shorter loan term means higher monthly payments but much less interest paid overall. A longer term lowers your monthly payment but increases the total interest. Comparing two or three scenarios side by side helps you pick the option that fits your budget and saves you the most money.
If you are weighing a home equity loan against other options, you might also explore a refinance calculator to see whether refinancing your primary mortgage could offer a better rate. For those looking to pay off an existing mortgage faster, a mortgage payoff calculator or mortgage extra payment calculator can show how additional payments reduce your balance and total interest over time.