Home Equity Loan Calculator: Payment, Interest and Borrowing Power

1. Enter your home value and your current mortgage balance. The gap between them is your raw equity.
2. Enter the maximum CLTV your lender allows. The tool works out how much of that equity you can actually borrow.
3. Set the loan amount, the APR and the term. Read the monthly payment, total interest, total paid and payoff time.

What each result tells you:

For the first mortgage behind this figure, the mortgage calculator builds the main payment, and the amortization calculator shows any loan month by month.

A home equity loan is a fixed-rate loan secured by the equity in your home. You receive the full amount as a single lump sum at closing, then repay it in equal monthly payments over a set term. Because the rate and payment are fixed, the schedule never changes, which is the main difference from a home equity line of credit.

Equity is the part of the home you own outright: its value minus everything you owe against it. Lenders let you borrow only a share of that value, measured by the combined loan-to-value ratio, so your first mortgage and the new loan together stay below a limit the lender sets. People use home equity loans for large one-time costs such as a renovation, debt consolidation or a major purchase. To check whether a new payment fits your budget, pair this tool with the home affordability calculator.

Two steps drive the result: first how much you can borrow, then what that loan costs each month.

1. Multiply your home value by the CLTV limit to get the largest total of loans the lender allows.
2. Subtract your current mortgage balance. What is left is the most you could draw as a home equity loan.
3. Pick a loan amount up to that figure, then apply the fixed rate and term to get the level monthly payment.
4. Each month, interest is charged on the balance and the rest of the payment reduces it, until the balance reaches zero.

If the rate is zero, the payment is simply the loan divided by the number of months. Every input here is yours to set; the tool bakes in no rate, no CLTV limit and no fee.

Suppose your home is worth 400,000 and you still owe 250,000 on your first mortgage. Your lender allows a combined loan-to-value of 85 percent.

Meaning: at that CLTV you can draw up to 90,000. Borrowing the full amount at 8 percent for 15 years costs about 860.09 a month, and interest adds up to 64,815.64, which is roughly 72 percent of what you borrow. A shorter term raises the payment but cuts the interest sharply.

A few inputs drive almost everything in the result.

Your CLTV Limit

This sets how much you can borrow. On a 400,000 home with 250,000 owed, an 80 percent limit leaves 70,000 of equity, while 90 percent leaves 110,000. The limit is set by the lender and your credit, not by this tool.

Your Mortgage Balance

The more you still owe, the less equity is free to borrow against. Paying the first mortgage down raises your available equity dollar for dollar.

Interest Rate

A higher APR raises both the payment and the total interest. Comparing offers on the same amount and term is the fastest way to see the difference; the APR calculator helps you line up quotes that include fees.

Loan Term

A longer term lowers the monthly payment but increases total interest, because interest is charged for more months. A shorter term does the reverse.

All three let you tap home equity, but they are repaid very differently.

A home equity loan keeps your existing first mortgage in place and adds a second, predictable payment. A cash-out refinance rolls everything into one new loan, which can reset your rate and term. Your overall borrowing capacity across all of them is still limited by your CLTV and by your income; the debt-to-income ratio calculator checks the income side.

For a Large One-Time Cost

A fixed lump sum suits a renovation, a single large bill or a planned purchase, where you know the amount up front and want a steady payment.

To Consolidate Higher-Rate Debt

If a home equity rate is well below your card rates, consolidating can lower your total interest, but it moves unsecured debt onto your home. Model the trade-off before you commit.

When You Want Payment Certainty

Unlike a variable line of credit, the payment here never moves. That predictability helps if your budget has little room for a rising rate.

1. Borrowing the Full Available Equity

Just because you can draw to the CLTV limit does not mean you should. Leaving a buffer protects you if home values fall.

2. Ignoring Closing Costs and Fees

Appraisal, origination and other fees add to the real cost. Compare offers on APR, which folds in fees, not on the rate alone.

3. Forgetting the Loan Is Secured by Your Home

Missing payments on a home equity loan can lead to foreclosure, the same as a first mortgage. Treat the payment as non-negotiable.

4. Choosing a Long Term for a Low Payment

Stretching the term lowers the payment but can double the interest. Use the payoff time and interest share results to weigh it.

5. Using an Old Home Value

Your lender will order its own appraisal. If your estimate is too high, your real available equity may be smaller than the tool shows.

The math matches the standard fixed-rate amortization formula and a straightforward CLTV equity calculation, so any gap from a lender usually comes from fees or appraisal differences, not the arithmetic.

It depends on your CLTV limit. Multiply your home value by that limit, then subtract your mortgage balance. On a 400,000 home with 250,000 owed at an 85 percent CLTV, you could borrow up to 90,000.

Combined loan-to-value is the share of your home value that all loans against it can reach. Lenders set their own limit, so the tool asks you to enter it rather than assuming a figure.

A home equity loan has a fixed rate and a fixed monthly payment for the whole term. A home equity line of credit is usually variable. Enter your own quoted rate in the APR field.

The tool uses the standard amortization formula: payment = P x r x (1 + r)^n / ((1 + r)^n - 1), where P is the amount borrowed, r is the APR divided by 12, and n is the number of months.

The calculator still shows the payment, but it flags that your requested amount is more than the equity available at your CLTV. Lower the amount or raise the CLTV limit if your lender allows it.

No. It covers principal and interest only. Add any appraisal, origination or other fees from your loan estimate, and compare offers on APR, which folds fees in.

A longer term lowers the monthly payment but raises total interest, because interest is charged for more months. A shorter term costs more each month but far less overall.

You can model any fixed-rate home equity loan. CLTV limits and rates are usually stricter for second homes and rentals, so enter the limit and rate your lender quotes for that property.

Sometimes, depending on how you use the funds and your own tax situation. IRS Publication 936 explains the rules. This tool does not assume any deduction; check with a tax professional.

No. The calculation runs in your browser and nothing is sent to our servers. Anything you choose to Save stays in this browser only.

• Amortization Schedule (Corporate Finance Institute, standard amortization formula).
• What is a home equity loan? (Consumer Financial Protection Bureau).
• Publication 936, Home Mortgage Interest Deduction (Internal Revenue Service, on home equity loan interest).