Home Equity Loan Calculator
Adjust the inputs below. Results update as you type.
How it works
Home equity loans are second mortgages with fixed rates and terms, unlike variable-rate HELOCs. Payment uses the same amortization formula as a first mortgage. Maximum loan = (appraised value × 80–85% CLTV) − first mortgage balance. Interest may be tax-deductible if used to buy, build, or substantially improve the home (consult a tax advisor). Foreclosure risk is real if you default.
Input guidance
- Use realistic rates from lender or provider quotes instead of headline averages.
- Model conservative, baseline, and optimistic scenarios before deciding.
- Include recurring real-world costs (fees, taxes, insurance, maintenance) where relevant.
The formula
A home equity loan is a fixed second mortgage against your equity (home value − mortgage balance). It amortizes with M = P · r · (1+r)^n / ((1+r)^n − 1).
Worked example
Borrowing $40,000 of equity at 8% over 10 years costs about $485/month. Lenders typically let you borrow up to a combined 80–85% of the home's value.
More examples to test
- Conservative case: use a higher interest rate and lower growth assumptions to stress-test affordability.
- Optimistic case: use a lower rate with stable income assumptions to compare upside potential.
How to interpret results
Treat this as a planning model, not a final approval tool. Compare at least two scenarios and focus on total-cost and cash-flow trade-offs.
When this can be inaccurate
Results can diverge due to fees, changing rates, tax rules, lender policies, and behavior changes that simplified models cannot fully capture.
Change history
- July 2026: Quality-reviewed for publication with formula checks and explanatory copy updates.
Site-wide corrections also appear on the corrections log.
Frequently asked questions
How much equity can I borrow?+
Usually up to about 80–85% of your home's value minus what you still owe, though limits vary by lender and credit.
Home equity loan vs. HELOC?+
A home equity loan is a fixed lump sum at a fixed rate; a HELOC is a revolving line you draw from, usually at a variable rate.
What is the risk?+
Your home is collateral. If you cannot repay, you risk foreclosure, so borrow against equity only for worthwhile, manageable purposes.
How should I use this result?+
Treat it as a planning estimate. Compare at least two realistic scenarios, then confirm with statements, quotes, or a qualified professional before acting.
How often should I refresh assumptions?+
Refresh whenever rates, income, costs, or policy limits change materially, and before making irreversible commitments.