Home Equity Loan Calculator
Estimate your monthly payment, total interest, and closing costs for a home equity loan, and see how much you could borrow against your home. Every figure updates as you type.
Your monthly payment
$1,433.48per month for 180 months
- Amount borrowed 58.1%
- Interest 41.9%
- Closing costs 0%
- Total of all payments
- $258,026.06
- Total interest
- $108,026.06
- Closing costs
- $0.00
- Total cost of borrowing
- $108,026.06
- APR (rate plus closing costs)
- 8.00%
- Cash you receive
- $150,000.00
- Cash due at closing
- $0.00
Balance over time
Borrowing limit
How much can you borrow?
Lenders limit how much you can owe against your home, as a percentage of its value (the loan-to-value ratio, or LTV). Enter your home's value and what you still owe on your mortgage to estimate the most you may be able to borrow.
You could borrow up to
$230,000.00
- Maximum total debt on your home
- $480,000.00
- Minus your mortgage
- $250,000.00
- Your home equity
- $350,000.00
- Your current LTV
- 41.7%
This is an estimate. Lenders also consider your credit, income, and other debts, and many set an upper limit on loan size.
Amortization schedule
| Period | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| Year 1 | $17,201.74 | $5,396.77 | $11,804.97 | $144,603.23 |
| Year 2 | $17,201.74 | $5,844.70 | $11,357.04 | $138,758.53 |
| Year 3 | $17,201.74 | $6,329.81 | $10,871.93 | $132,428.72 |
| Year 4 | $17,201.74 | $6,855.18 | $10,346.56 | $125,573.54 |
| Year 5 | $17,201.74 | $7,424.15 | $9,777.58 | $118,149.39 |
| Year 6 | $17,201.74 | $8,040.36 | $9,161.38 | $110,109.03 |
| Year 7 | $17,201.74 | $8,707.70 | $8,494.04 | $101,401.33 |
| Year 8 | $17,201.74 | $9,430.44 | $7,771.30 | $91,970.90 |
| Year 9 | $17,201.74 | $10,213.16 | $6,988.58 | $81,757.74 |
| Year 10 | $17,201.74 | $11,060.84 | $6,140.89 | $70,696.90 |
| Year 11 | $17,201.74 | $11,978.89 | $5,222.85 | $58,718.01 |
| Year 12 | $17,201.74 | $12,973.13 | $4,228.61 | $45,744.88 |
| Year 13 | $17,201.74 | $14,049.89 | $3,151.84 | $31,694.98 |
| Year 14 | $17,201.74 | $15,216.03 | $1,985.71 | $16,478.95 |
| Year 15 | $17,201.74 | $16,478.95 | $722.79 | $0.00 |
Early payments are mostly interest. Over time, more of each payment goes to principal. Figures are rounded to the cent for display, so your lender's statement may differ by a few cents.
What is a home equity loan?
A home equity loan lets you borrow against the equity in your home. You receive a lump sum up front and repay it over a set number of years in fixed monthly payments, usually at a fixed interest rate. Because your home secures the loan, the rate is often lower than on credit cards or personal loans. It is sometimes called a second mortgage, because it is a separate loan on top of your main mortgage.
How to use this calculator
- Find your limit (optional). Enter your home's value and mortgage balance to see roughly how much you could borrow. One click copies that amount into the loan calculator.
- Enter the loan. Add the amount, the interest rate, and the term in years.
- Add closing costs (optional). Turn on closing costs to see the APR, your total cost of borrowing, and the cash you will receive.
- Read the results. You get the monthly payment, total interest, total of all payments, a balance chart, and a full amortization schedule you can download.
How much can you borrow?
Lenders usually cap the total you can owe against your home at a percentage of its value. To find your limit, multiply your home value by that percentage, then subtract what you still owe on your mortgage.
Available to borrow = Home value × LTV limit − Mortgage balance
For example, a home worth $500,000 with a $230,000mortgage and an 80% limit gives $500,000 × 80% −$230,000 = $170,000.00. Many lenders use limits between 80% and 85%, and some allow up to 90%. Lenders may also set a maximum loan size.
How the monthly payment is calculated
Monthly payment = P × r ÷ (1 − (1 + r)−n)Monthly interest = Balance × rPrincipal paid = Payment − Monthly interest
P is the loan amount, r is the interest rate divided by 12 (as a decimal), and n is the number of monthly payments. The payment stays the same, but the split changes: early payments are mostly interest, and later payments are mostly principal.
Example: $150,000 at 8%
A $150,000 loan at 8% over15 years has a monthly payment of $1,433.48and costs $108,026.06 in interest. A shorter term raises the payment but lowers the total interest:
| Loan term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 10 years | $1,819.91 | $68,389.67 | $218,389.67 |
| 15 years | $1,433.48 | $108,026.06 | $258,026.06 |
| 20 years | $1,254.66 | $151,118.42 | $301,118.42 |
Closing costs and APR
Home equity loans can come with closing costs such as origination, appraisal, document, and title fees. They are often cited at around 2% to 5% of the loan amount, though they vary by lender. You can pay them at closing or have them deducted from the loan. Some lenders offer no-closing-cost loans, which usually have a higher interest rate or limits on paying off early.
Because costs and rates differ, comparing loans by interest rate alone can be misleading. TheAPR combines the interest rate and the closing costs into one yearly figure. Turn on closing costs in the calculator to see it, and compare APRs when you shop for a loan.
What lenders look at
- Loan-to-value ratio. The total you owe on your home compared with its value, as described above.
- Credit history. Many lenders look for a credit score in the mid-600s or higher, and better scores usually get better rates.
- Debt-to-income ratio. Lenders often prefer total monthly debts to be below roughly 43% to 50% of your income.
- Your home and documents. An appraisal, proof of income, and existing liens on the home can all affect approval.
Common uses
- Major home repairs and improvements, such as a roof or kitchen remodel.
- Consolidating higher-interest debt, such as credit card balances.
- Education costs, such as tuition or training.
- Large planned expenses, such as medical bills or a wedding.
Home equity loan, HELOC, or cash-out refinance?
There are three common ways to borrow against your home. The right one depends on how much you need, when you need it, and how your current mortgage compares with today's rates.
| Home equity loan | HELOC | Cash-out refinance | |
|---|---|---|---|
| How you receive money | One lump sum | Borrow as needed during a draw period | Cash at closing, from a new mortgage |
| Interest rate | Usually fixed | Usually variable | Fixed or adjustable |
| Monthly payment | Fixed | Can change | Replaces your mortgage payment |
| Your existing mortgage | Stays in place | Stays in place | Replaced by a new loan |
| Best for | One planned expense | Ongoing or uncertain costs | When rates are lower than your current mortgage |
Risks and tips
- Your home is the collateral. If you cannot repay, the lender can foreclose. Borrow only what you need and make sure the payment fits your budget.
- Compare offers from several lenders, and compare APRs, not just rates.
- Ask about prepayment penalties and whether the rate is truly fixed.
- A shorter term saves interest but raises the payment. Check that you can afford it in a tight month.
- Interest may be tax deductible only in some cases, such as when the money is used to improve the home. Ask a tax professional.
This calculator is designed mainly for U.S. homeowners and gives estimates for planning and education. It does not include taxes, insurance, or lender-specific fees, and it is not financial advice. Your lender's figures are the final word.
Home equity terms explained
- Home equity
- The value of your home minus what you owe on it.
- Loan-to-value (LTV)
- Your total home debt divided by your home value. Lenders set a maximum.
- Collateral
- An asset, here your home, that the lender can claim if you do not repay.
- Amortization
- Repaying a loan in regular payments that cover interest and principal.
- Closing costs
- Fees paid to set up the loan, such as origination, appraisal, and title fees.
- APR
- The yearly cost of the loan including interest and closing costs.
- Debt-to-income ratio (DTI)
- Your monthly debt payments divided by your monthly income.
- Second mortgage
- Another name for a home equity loan, because it sits behind your first mortgage.
Frequently asked questions
What is a home equity loan?
A home equity loan, sometimes called a second mortgage, lets you borrow a lump sum against the equity in your home. You repay it over a fixed term with fixed monthly payments, and the interest rate is usually fixed too. Because your home secures the loan, rates are often lower than on credit cards or personal loans.
How much can I borrow with a home equity loan?
Lenders limit the total you can owe against your home, usually as a percentage of its value called the loan-to-value (LTV) ratio. Multiply your home value by the lender's LTV limit, then subtract your mortgage balance. For example, a $500,000 home at an 80% limit with a $230,000 mortgage leaves $170,000. Your credit, income, and other debts also affect what you can actually get.
How is the monthly payment calculated?
The payment is based on the loan amount, the interest rate, and the number of monthly payments. Each payment covers that month's interest first, and the rest reduces the balance. Early payments are mostly interest, and later payments are mostly principal. The payment stays the same for fixed-rate loans.
What is the difference between the interest rate and the APR?
The interest rate is the cost of borrowing the money. The APR (annual percentage rate) also includes the closing costs, spread over the life of the loan, so it shows the real yearly cost of borrowing. When you compare lenders, the APR is more useful than the rate alone.
Should closing costs be deducted from the loan or paid upfront?
The two choices cost about the same over the life of the loan. If costs are deducted from the loan, you receive less cash but pay nothing out of pocket at closing. If you pay them upfront, you receive the full loan amount but need cash on hand at closing. Either way, the APR shown here reflects the true cost.
What is the difference between a home equity loan and a HELOC?
A home equity loan gives you a lump sum with a fixed rate and a fixed payment. A home equity line of credit (HELOC) works more like a credit card: you borrow as needed during a draw period, and the rate is usually variable. A home equity loan suits one planned expense, and a HELOC suits costs that come in stages.
Is home equity loan interest tax deductible?
In the United States, the interest may be deductible in some cases, generally when the money is used to buy, build, or substantially improve the home that secures the loan. It is usually not deductible when the money is used for other purposes. Rules and limits change, so check with a tax professional.
Can I lose my home if I cannot repay a home equity loan?
Yes. Your home is the collateral, so if you stop making payments, the lender can start foreclosure. Borrow only what you need, make sure the payment fits your budget, and keep an emergency fund.