Home Equity Loan Calculator
Property Information
Loan Details
Additional Options
Loan Summary
Available Equity
$150,000
Combined LTV Ratio
85.7%
Monthly Payment
$927.01
Total Interest
$66,861.80
Home Equity Breakdown
Loan Details
| First Payment | June 1, 2025 |
| Last Payment | May 1, 2040 |
| Number of Payments | 180 |
| Total of All Payments | $166,861.80 |
This calculator provides estimations only and should not be considered financial advice. Actual loan terms may vary. Consult a financial professional before making decisions.
🧾 What Is a Home Equity Loan?
A home equity loan, also known as a second mortgage, allows homeowners to borrow money by leveraging the equity they’ve built in their property.
In simple terms:
Your home’s equity = current market value – outstanding mortgage balance
Home equity loans provide a lump sum amount with fixed interest rates and fixed repayment terms, making them ideal for:
Home improvements
Debt consolidation
Education expenses
Medical emergencies
Major purchases
🔢 What Is a Home Equity Loan Calculator?
A Home Equity Loan Calculator is a free tool that helps homeowners estimate:
✅ How much they can borrow against their home’s equity
✅ The total loan amount they may qualify for
✅ Estimated monthly payments
✅ Interest costs over the life of the loan
It helps you make smarter financial decisions—without going through a full credit application.
🧮 How Does the Calculator Work?
To determine how much you can borrow, lenders typically allow up to 80%–90% of your home’s appraised value, minus what you owe on your mortgage.
🧠 Formula:
Maximum Loan Amount = (Home Value × Allowed LTV %) – Current Mortgage Balance
📊 Inputs You’ll Need
Here’s what to enter into the calculator:
| Input | Description |
|---|---|
| Home’s Current Market Value | Your property’s appraised or estimated value |
| Outstanding Mortgage Balance | What you still owe on your home loan |
| Loan-to-Value Limit (LTV%) | Typically 80%, but some lenders offer up to 90% |
| Loan Term | Usually 5–30 years |
| Interest Rate | Fixed annual rate (e.g., 7%) |
👉 The output will show:
Estimated loan amount
Monthly payment amount
Total interest over the loan term
📌 Example Calculation
Let’s say:
Home Value = $400,000
Mortgage Balance = $200,000
Lender allows up to 85% LTV
Interest rate = 7%
Loan term = 15 years
Step 1: Max Loan Value
= 85% of $400,000 = $340,000
Step 2: Subtract Mortgage Balance
= $340,000 – $200,000 = $140,000 available equity
If you borrow $100,000 of that, your monthly payments might be around $898/month (depending on rate & term).
🔐 Key Benefits of Using a Home Equity Loan Calculator
✅ Helps you pre-qualify before approaching a lender
✅ Allows you to compare multiple scenarios
✅ Gives a clear view of monthly payments and total interest
✅ Supports debt management and financial planning
⚖️ Pros & Cons of Home Equity Loans
✅ Pros:
Fixed interest rates
Predictable monthly payments
Potentially lower rates than credit cards
Interest may be tax-deductible (if used for home improvements)
❌ Cons:
Uses your home as collateral
Less flexibility than HELOCs (Home Equity Lines of Credit)
Can lead to foreclosure if not repaid
Adds debt on top of your existing mortgage
🔁 Home Equity Loan vs. HELOC (Quick Comparison)
| Feature | Home Equity Loan | HELOC |
|---|---|---|
| Loan Type | Lump sum | Revolving credit line |
| Interest Rate | Fixed | Usually variable |
| Repayment | Fixed term (5–30 years) | Flexible draw/payback |
| Best For | Large one-time expenses | Ongoing/uncertain costs |
📱 Who Should Use the Home Equity Loan Calculator?
This tool is ideal for:
✔️ Homeowners looking to tap into equity
✔️ Financial advisors creating client scenarios
✔️ DIY renovators planning budgets
✔️ Anyone comparing loan options
✔️ People consolidating high-interest debt
🧠 Tips Before You Apply
✅ Check your credit score – higher scores = better rates
✅ Compare lenders – fees, interest rates, loan terms vary
✅ Know your home’s value – get a professional appraisal if possible
✅ Don’t overborrow – leave a cushion of equity for safety
✅ Understand all fees – closing costs, origination fees, and insurance
🏁 Final Thoughts
A Home Equity Loan Calculator puts the power back in your hands. Before meeting a lender or signing anything, know your numbers, weigh your options, and protect your financial future.
💬 Got questions about home equity loans or comparing them with HELOCs? Drop them below or connect with a licensed mortgage advisor.