About the Home Equity Loan Calculator
A home equity loan, sometimes called a second mortgage, lets you borrow a lump sum against the equity in your home and repay it with fixed monthly payments. This calculator shows your current equity, the maximum a lender is likely to lend based on its combined loan-to-value (CLTV) limit, and the payment and total interest on the amount you want to borrow.
Lenders look at your first mortgage and the new loan together. With a typical 85% CLTV cap, a $400,000 home with $250,000 owed supports total debt of $340,000, so you could borrow up to $90,000 — not 85% of your equity, which is a common misunderstanding. The calculator also shows how much equity would remain after the loan.
Use it to size a renovation, debt consolidation or large expense, and to compare a fixed-rate home equity loan with a HELOC or cash-out refinance. Payments assume a fixed rate and monthly amortization over the term you choose; closing costs, if any, are not included.
With the default inputs, the monthly payment is $477.83. Change any value above to recalculate instantly.
How to use the home equity loan calculator
- 1Enter your home’s current market value and your mortgage balance.
- 2Set the lender’s CLTV limit — 85% is a common maximum.
- 3Enter how much you want to borrow, the rate and the term.
- 4Check the maximum you can borrow and the combined LTV.
- 5Review the fixed monthly payment and total interest before applying.
Formula and method
Equity is the home value minus the mortgage balance. Lenders cap the combined balance of all loans on the home at a percentage of its value (the CLTV limit), so the most you can borrow is value × CLTV minus the existing mortgage — not a percentage of your equity.
The monthly payment on the amount borrowed, L, uses the standard fixed-rate amortization formula with r = annual rate ÷ 12 and n = term in months. Total interest is the sum of monthly interest charges, which equals M × n − L. Combined LTV after the loan is (mortgage + L) ÷ value.
- L
- Home equity loan amount
- M
- Monthly payment
- r
- Monthly rate (annual rate ÷ 12 ÷ 100)
- n
- Number of monthly payments
- CLTV
- Combined loan-to-value limit set by the lender
Worked examples
$50,000 at 8% for 15 years on a $400,000 home
Equity is $400,000 − $250,000 = $150,000. At 85% CLTV the lender allows $340,000 of total debt, so up to $90,000 could be borrowed. A $50,000 loan at 8% over 15 years costs $477.83 a month and about $36,009 in interest.
$75,000 for 10 years at 7.5%
With an 80% CLTV cap on a $550,000 home and $320,000 owed, the limit is $120,000. Borrowing $75,000 at 7.5% for 10 years costs $890.26 a month and about $31,832 in interest, leaving $155,000 of equity.
Asking for more than the lender allows
At 85% CLTV, $300,000 supports $255,000 of total debt. With $230,000 already owed, the maximum is $25,000; a $40,000 loan would push combined LTV to 90%, above the limit.
Frequently asked questions
How much can I borrow with a home equity loan?+
Most lenders let your total mortgage debt reach 80% to 90% of the home’s value. Multiply the value by that CLTV limit and subtract what you owe: $400,000 × 85% − $250,000 = $90,000.
What credit score do I need for a home equity loan?+
Many lenders look for a score of about 680 or higher, and the best rates usually go to scores above 740. They also check your debt-to-income ratio, commonly wanting it at or below about 43%.
Is home equity loan interest tax deductible?+
Under current federal rules the interest is deductible only if you itemize and the money is used to buy, build or substantially improve the home securing the loan, within the overall mortgage debt limit. IRS Publication 936 explains the rules for each tax year.
What is the difference between a home equity loan and a HELOC?+
A home equity loan pays a lump sum up front with a fixed rate and fixed payment. A HELOC is a revolving line you draw on as needed, usually with a variable rate and interest-only payments during the draw period.
What are the risks of a home equity loan?+
The loan is secured by your home, so falling behind can lead to foreclosure. Borrowing near the CLTV limit also leaves little cushion if home prices fall, making it harder to sell or refinance.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.