Home Equity Loan Calculator
Find how much you can borrow against your home equity and what the fixed monthly payment will be.
Inputs
Outstanding balance on your first (primary) mortgage.
Maximum total debt as % of home value. Most lenders cap at 80–90%.
How much you wish to borrow. Cannot exceed the maximum allowed.
Monthly Payment
$613.26
Maximum You Can Borrow
$145,000
Loan Amount
$50,000
Total Interest Paid
$23,592
Total Repaid
$73,592
Current Home Equity
$220,000
Current LTV (First Mortgage)
56.00%
Combined LTV After Loan
66.00%
Remaining Equity After Loan
$170,000
Step by step
Current home equity
$500,000 − $280,000
= $220,000
Maximum borrowable at 85% CLTV
$500,000 × 85% − $280,000
= $145,000
Monthly payment (fixed rate, fully amortizing)
pmt($50,000, 8.25% ÷ 12, 120 months)
= $613.26
Combined LTV after loan
($280,000 + $50,000) ÷ $500,000
= 66.00%
How it works
A home equity loan gives you a lump sum at a fixed rate, secured by your home. Lenders limit borrowing to ensure that your total mortgage debt (first mortgage + equity loan) does not exceed a combined LTV (CLTV) threshold — typically 80–90% of the home's current appraised value. Because the rate is fixed, monthly payments never change, unlike a HELOC. Home equity loans are sometimes called 'second mortgages' and sit junior to the first mortgage in priority.
Formulas
Maximum equity loan
Max Loan = Home Value × CLTV limit − First mortgage balance
- V
- Current home value
- CLTV
- Combined LTV limit (e.g. 85%)
- B₁
- First mortgage balance
Monthly payment
M = L × r(1+r)ⁿ / ((1+r)ⁿ − 1)
- L
- Loan amount
- r
- Monthly interest rate
- n
- Number of monthly payments
Approval and rates depend on credit score, income, LTV and lender guidelines. This calculator is for estimation only.
Frequently Asked Questions
How is a home equity loan different from a HELOC?
A home equity loan disbursed as a lump sum with a fixed rate and fixed monthly payments. A HELOC is a revolving credit line with a variable rate and interest-only payments during the draw phase. Use the HELOC Calculator to compare.
What credit score do I need?
Most lenders require at least a 620 credit score, and the best rates typically require 740+. Your CLTV, income and debt-to-income ratio also matter. Shop multiple lenders for the best rate.
Is the interest tax-deductible?
Only if the proceeds are used to buy, build or substantially improve the home securing the loan. Interest on equity loans used for other purposes is no longer deductible under the Tax Cuts and Jobs Act of 2017.
What happens to my equity loan if I sell the home?
Both the first mortgage and the equity loan are paid off from the sale proceeds at closing. The equity loan lender holds a lien on the property and must be satisfied before you receive any net proceeds.