A home equity loan lets you borrow against the value of your home, using your house as collateral. If you have built up equity over time, a home equity loan can provide a one-time lump sum you repay with fixed monthly payments. This calculator helps you estimate how much you may be able to borrow and what your payment could look like, using straightforward inputs and plain-English results.
Home Equity Loan Calculator
How to use this home equity loan calculator
This home equity loan calculator is designed to show two big things: how much you might be able to borrow based on your home’s value and lender limits, and what a monthly payment could look like at a given interest rate and term. The inputs are intentionally simple so you can try different scenarios quickly.
Here is what each field means:
- Estimated home value ($): Your best estimate of what your home is worth today. Many people start with a recent appraisal, a comparative market analysis from a real estate agent, or online estimate tools.
- Current mortgage balance ($): How much you still owe on your main mortgage. This number is usually on your most recent mortgage statement.
- Target combined LTV limit (%): The maximum combined loan-to-value (CLTV) you want to model. CLTV is the total of your existing mortgage plus any new home equity loan, divided by your home value. Many lenders keep this at or below about 80% for traditional home equity loans.
- Home equity loan rate (APR %): The annual percentage rate you expect for the home equity loan. This will depend on your credit profile, lender and market conditions.
- Loan term (years): How long you plan to take to repay the home equity loan. Common terms include 5, 10, 15 or 20 years.
As you change the inputs, the calculator updates automatically. If something is unrealistic or outside the allowed ranges (for example, a negative home value or a CLTV limit above 100%), the tool shows an error message instead of a misleading result. You can use the Reset button to go back to the default scenario at any time.
Suppose you enter the following values:
- Estimated home value: $400,000
- Current mortgage balance: $260,000
- Target combined LTV limit: 80%
- Home equity loan rate: 9%
- Loan term: 15 years
With these assumptions, the calculator may show an estimated home equity loan of roughly $60,000. That would put your combined loan-to-value at about 80% and leave about $80,000 in remaining equity. Your estimated monthly payment might be around the low $600s, depending on how the numbers round. Actual offers will vary by lender.
Tip: Try adjusting your CLTV limit from 75% to 85% and see how the maximum loan amount, monthly payment and remaining equity change. This can give you a feel for how much risk you are comfortable taking on.
Understanding CLTV, equity and your borrowing limit
Home equity loans are usually constrained by your combined loan-to-value ratio, or CLTV. CLTV looks at all loans secured by the home, including your primary mortgage and any new home equity loan, compared with the home’s current value. The higher your CLTV, the more leveraged your home is.
The calculator uses your home value, your current mortgage balance and your chosen CLTV limit to estimate a potential borrowing amount. The basic idea is:
- Maximum total debt allowed = Home value × CLTV limit
- Estimated home equity loan = Maximum total debt allowed − Current mortgage balance
If that calculation produces a negative number or zero, it means your existing mortgage already uses up the allowed borrowing at that CLTV limit. In that case, the calculator will show that there is no available equity for a new home equity loan under those assumptions.
When the result is positive, the tool shows an estimated loan amount and a “Home value breakdown” bar. One line represents your total debt (mortgage plus the modeled home equity loan) and the other shows remaining equity. This gives you a visual sense of how much of your home’s value would still be yours after taking the loan.
| Scenario | Home value | Mortgage balance | CLTV limit | Approx. loan amount |
|---|---|---|---|---|
| Lower leverage | $300,000 | $150,000 | 70% | Roughly $60,000 |
| Moderate leverage | $400,000 | $260,000 | 80% | Roughly $60,000 |
| High leverage | $400,000 | $340,000 | 85% | Roughly $0–$20,000 |
Note: The CLTV limit you can actually get depends on the lender, the type of loan, your credit profile and market conditions. Some lenders are more conservative and others will go higher, especially for strong borrowers.
Monthly payments and when a home equity loan makes sense
The calculator also estimates a monthly payment based on the modeled loan amount, interest rate and term. Home equity loans typically use a standard amortizing payment schedule, meaning each payment includes both principal and interest and the balance is fully repaid at the end of the term.
In general, higher interest rates or longer terms will increase the total interest you pay, even if the monthly payment looks more affordable. Shorter terms usually mean higher monthly payments but less total interest cost over the life of the loan. Watching how the payment changes as you adjust the rate and term can help you find a balance between affordability and overall cost.
Some situations where a home equity loan may fit:
- You have a specific, one-time expense such as a home renovation, major medical bill or debt consolidation goal.
- You prefer predictable payments and a fixed interest rate instead of a variable-rate line of credit.
- You have solid income and a budget that comfortably supports the new payment on top of your existing mortgage.
On the other hand, borrowing too aggressively against your home can increase risk. If your income falls or home values decline, a high CLTV could make it harder to refinance, sell or absorb financial shocks.
Important: Because your home is collateral, falling behind on payments can lead to foreclosure. Before taking out a home equity loan, consider how stable your income is, whether you have an emergency fund and whether there are lower-risk ways to reach your goal.
Frequently Asked Questions (FAQs)
How much can I borrow with a home equity loan?
It depends on your home’s value, your existing mortgage balance, your credit profile and each lender’s rules. Many lenders cap the combined loan-to-value around 80% to 85%, meaning your total mortgage plus home equity loan cannot exceed that share of your home’s value. The calculator lets you test different CLTV limits to see how your estimated borrowing power changes.
What is the difference between a home equity loan and a HELOC?
A home equity loan is a lump-sum loan with a fixed rate and fixed monthly payments. A home equity line of credit (HELOC) is a revolving line you can draw on as needed, often with a variable interest rate. This calculator focuses on traditional home equity loans, not HELOCs, but understanding your equity and CLTV is important for both.
Does this calculator include closing costs or fees?
No. The home equity loan calculator focuses on the loan amount, CLTV and monthly payment based on your rate and term. Many lenders also charge closing costs, appraisal fees or other charges, which would increase your total cost. Be sure to ask any lender for a full estimate of fees before you apply.
Can I use a home equity loan for anything I want?
In many cases you can, but that does not mean you should. Common uses include home improvements, consolidating high-interest debt or large planned expenses. Some uses, like paying everyday bills, can be risky because they turn short-term problems into long-term debt secured by your home.
Is the interest on a home equity loan tax-deductible?
In general, U.S. tax rules only allow you to deduct interest on home equity debt when the loan is used to buy, build or substantially improve the home that secures the loan, and only up to certain limits. Tax rules are complex and change over time, so consider talking with a tax professional about your specific situation.