See how much you can borrow against your home equity and what it costs monthly.
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.
Maximum equity loan
Max Loan = Home Value × CLTV limit − First mortgage balance
Monthly payment
M = L × r(1+r)ⁿ / ((1+r)ⁿ − 1)
Approval and rates depend on credit score, income, LTV and lender guidelines. This calculator is for estimation only.
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.
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.
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.
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.