Introduction
A home equity loan lets you borrow money based on the value you have built up in your home. You get the funds in one lump sum and pay them back in fixed monthly payments over a set number of years. This makes it a good option for large costs like home repairs, debt payoff, or major purchases.
This home equity loan calculator helps you see how much you may be able to borrow, what your monthly payment would be, and how much interest you will pay over the life of the loan. You can also compare different loan amounts, rates, and terms side by side to find the option that fits your budget. An amortization schedule breaks down every payment so you can see exactly where your money goes each month.
Enter your home value, mortgage balance, desired loan amount, and interest rate to get started. Results appear right away so you can adjust the numbers and explore different scenarios before you apply.
How to Use Our Home Equity Loan Calculator
Enter details about your home, mortgage, and desired loan to see your estimated monthly payment, total interest cost, and a full amortization schedule.
Section 1: Borrowing Power Estimator
Estimated Home Value — Enter what your home is worth today. You can use a recent appraisal or an online estimate.
Current Mortgage Balance — Enter the amount you still owe on your primary mortgage. You can find this on your latest mortgage statement.
Lender LTV Ratio — Pick the loan-to-value ratio your lender allows. Most lenders cap this at 85%, but some go higher or lower.
Credit Score Range — Select the range that matches your credit score. A higher score often means a lower interest rate.
State — This field is optional. Some states, like Texas and Florida, limit how much you can borrow against your home.
Click Estimate Borrowing Power to see the maximum loan amount you may qualify for. Click Use this amount in the calculator to send it to Section 2.
Section 2: Loan Payment & Cost Calculator
Desired Loan Amount — Enter the amount you want to borrow. It must be between $25,000 and $500,000.
Annual Interest Rate — Enter the yearly interest rate your lender quoted you. If you do not have a quote yet, the default value is a good starting point.
Loan Term — Choose how many years you want to repay the loan. Shorter terms have higher monthly payments but cost less in total interest.
Include Closing Costs — Turn this on if you want to factor in closing costs. You can enter a dollar amount or switch to a percentage of the loan using the toggle button.
Closing Cost Payment Method — Choose whether to pay closing costs upfront or roll them into your loan balance. Rolling them in raises your monthly payment and total interest.
Checking Account Discount — Check this box if you have or plan to open a checking account with your lender. This applies a 0.25% rate discount to your calculations.
Click Calculate to see your monthly payment, total interest, total cost, and a full loan summary. Click Reset to return all fields to their default values.
Section 3: Rate Sensitivity & Scenario Comparison
The Rate Sensitivity Table fills in automatically after you calculate. It shows how your monthly payment changes if interest rates rise or fall by up to 2%.
Scenario A and Scenario B — Enter a different loan amount, interest rate, and term in each scenario to compare them side by side against your base loan. Click Compare Scenarios to see which option has the lowest monthly payment and the lowest total interest.
Section 4: Amortization Schedule
This section fills in automatically after you calculate. Use the Monthly View tab to see every single payment broken down by principal and interest. Use the Yearly Summary tab for a faster overview. The Equity Built Over Time chart shows how your loan balance drops and your equity grows each year.
What Is a Home Equity Loan?
A home equity loan lets you borrow money using the value you have built up in your home. Equity is the difference between what your home is worth and what you still owe on your mortgage. For example, if your home is worth $300,000 and you owe $150,000, you have $150,000 in equity. A lender will let you borrow a portion of that equity as a lump sum of cash.
How a Home Equity Loan Works
You receive the full loan amount at once and pay it back in fixed monthly payments over a set number of years. The interest rate stays the same for the entire life of the loan. This makes it easy to budget because your payment never changes. Most home equity loans have terms between 5 and 30 years.
Because your home is used as collateral, home equity loans often have lower interest rates than credit cards or personal loans. However, this also means your home is at risk if you cannot make your payments.
What Is LTV and Why Does It Matter?
LTV stands for loan-to-value ratio. It tells you how much of your home's value a lender will let you borrow against. Most lenders cap the combined LTV at 80% to 85%, though some go higher. A lower LTV means less risk for the lender and often a better rate for you.
Common Uses for a Home Equity Loan
People often use home equity loans to pay for home repairs, debt consolidation, medical bills, or college tuition. Because the interest may be tax-deductible when the money is used for home improvements, many borrowers choose this option for renovation projects. Always check with a tax advisor to confirm if you qualify for this deduction.
Costs to Keep in Mind
Home equity loans come with closing costs, usually between 2% and 5% of the loan amount. These fees cover things like the appraisal, title search, and loan origination. You can pay these costs upfront or roll them into the loan. Rolling them in raises your monthly payment and total interest, so it helps to compare both options before you decide.
Your credit score also plays a big role. A higher score typically means a lower interest rate, which saves you money over the life of the loan. Some lenders also offer a small rate discount if you set up autopay from a checking account with them.