Home Equity Calculator
See How Much You Can Borrow
Estimate Summary
Disclaimer: The results generated by this home equity loan calculator are estimates provided for informational and planning purposes only. They do not represent a loan offer, a commitment to lend, or a guarantee of any specific rate, loan amount, or terms.
Your home is likely your most valuable asset, and over time it builds equity: the portion of your home's value you actually own, free and clear. A home equity loan lets you convert that built-up equity into cash, at a fixed rate, with predictable monthly payments. But before you apply, you need to know three things: how much equity you have, how much a lender will let you borrow, and what that loan will actually cost you each month. This home equity loan calculator answers all three instantly. Enter your home's current value, your remaining mortgage balance, your desired loan amount, and a rate estimate.
How to Use Home Equity Loan Calculator
Enter your home's current market value :Use a recent appraisal if you have one. If not, a reliable estimate from a real estate site works for planning purposes. Your lender will order a formal appraisal during the application process, so this number just needs to be reasonably close for now.
Enter your current mortgage balance :Check your most recent mortgage statement for your outstanding principal balance. If you have a first mortgage and a HELOC, enter the combined balance. Lenders look at your total debt against the home when calculating how much they'll lend.
Enter your desired loan amount :How much do you want to borrow? If you're not sure yet, try a few different amounts to see how the monthly payment changes. The calculator will also show you whether your requested amount falls within typical lending limits.
Enter the interest rate :Use a rate you've been quoted, or a current market estimate if you're still shopping. Home equity loan rates are typically higher than first mortgage rates but significantly lower than personal loans or credit cards.
Select your loan term :Home equity loans commonly come in 5, 10, 15, or 20-year terms. Shorter terms mean higher monthly payments but less total interest. Longer terms lower your monthly payment but cost more over time.
Review your results :The home equity payment calculator shows your estimated monthly payment, total interest paid, your combined loan-to-value ratio, and how much equity you'll retain after the loan. Adjust any input and the calculator updates instantly so you can find the right combination.
What Is a Home Equity Loan?
A home equity loan lets you borrow a lump sum against the equity you've built in your home. Unlike a home equity line of credit (HELOC), which works like a revolving credit line, a home equity loan gives you the full amount upfront and locks in a fixed interest rate for the life of the loan.
This means your monthly payment never changes. From the first payment to the last, you know exactly what you owe. That predictability makes home equity loans a strong choice for one-time expenses where you know the total amount upfront.
Key characteristics of a home equity loan :
Fixed interest rate :Your rate and payment stay the same for the entire loan term
Lump-sum disbursement :You receive the full loan amount at closing
Repaid over a set term :Typically, 5 to 20 years, fully amortizing
Secured by your home : your property serves as collateral, which enables the lower rate
How Much Can You Borrow?
Lenders don't let you borrow against 100% of your equity. They use two key ratios to determine your maximum loan amount:
Loan-to-Value (LTV) : Your primary mortgage balance divided by your home's current appraised value. For example, a $230,000 mortgage on a $480,000 home carries an LTV of roughly 48%.
Combined Loan-to-Value (CLTV) :Your total mortgage debt, including the new home equity loan, divided by your home's value. Most lenders cap CLTV at 80% to 85%, though some go up to 90% for well-qualified borrowers.
Common Uses for a Home Equity Loan
Home renovations and additions :Reinvesting equity into your home can increase your property's value. Kitchen remodels, bathroom upgrades, room additions, and energy-efficiency improvements are among the most common uses. Because the loan is secured by the home, the rate is far lower than unsecured financing.
Debt consolidation :Carrying high-interest credit card debt or personal loans at 18% to 25% and replacing it with an 8% to 9% home equity loan can save thousands in interest and simplify your monthly payments into one predictable amount.
College tuition and education costs :Many families use home equity to bridge the gap between financial aid and the actual cost of education, particularly when the alternative is private student loans at higher rates.
Medical expenses :Unexpectedly large medical bills can be financed through a home equity loan, often at a significantly lower rate than medical payment plans or credit cards.
Major purchases and life events :Weddings, vehicle purchases, or starting a business are all situations where borrowers look to home equity for stable, lower-cost financing.
Emergency financial cushion :Some homeowners establish a home equity loan for financial security, giving them access to a known amount at a fixed rate in the event of a job loss or major unexpected expense.
What Affects Your Home Equity Loan Rate?
The rate your lender offers is directly tied to your financial profile and current market conditions. These are the factors that move your rate up or down:
Credit score :Most lenders require a minimum score of 620, but rates improve significantly above 700 and are most competitive above 740. A 40-point difference in credit score can translate to nearly a full percentage point difference in rate.
Combined loan-to-value ratio (CLTV) :The lower your CLTV, the less risk the lender takes on. Borrowers at 60% to 70% CLTV typically qualify for better rates than those at 80% to 85%.
Debt-to-income ratio (DTI) :Lenders want to see that your total monthly debt obligations, including the new loan payment, stay within acceptable limits. Most lenders target a DTI under 43%.
Loan amount and term :Shorter terms generally carry lower rates than longer ones. Very small loan amounts (under $25,000) sometimes carry slightly higher rates because origination costs are proportionally higher.
Lender and market conditions : Home equity loan rates move with the prime rate and broader interest rate environment. Shopping with at least two to three lenders is consistently one of the most effective ways to reduce your rate.
How to Maximize Your Available Equity Before Applying
Pay down your mortgage balance :Even modest extra principal payments over 12 to 18 months increase the equity available to borrow against.
Improve your home's appraised value :Strategic upgrades, updated kitchens and bathrooms, landscaping, and exterior improvements can meaningfully increase your appraisal value.
Wait for market appreciation :If your local real estate market is rising, waiting 12 months can significantly increase your home's appraised value and your available equity.
Raise your credit score :A higher score won't give you more equity, but it will unlock a higher CLTV limit with some lenders, effectively allowing you to borrow more against the same equity.
Shop lenders with higher CLTV limits :Some credit unions and portfolio lenders allow CLTV up to 90%, compared to the standard 85%.
