Home Equity Loan Calculator
Determine how much equity you can borrow against your home, your monthly payment, and the total cost of a home equity loan.
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How to use this calculator
LTV = loan-to-value ratio. The maximum you can borrow is the lesser of your desired amount and the available equity.
- 1
Enter your home's current market value (get a recent appraisal or use an online estimate).
- 2
Enter your remaining mortgage balance.
- 3
Set the LTV limit — most lenders cap combined LTV at 80–85%.
- 4
Enter the loan amount you want, the interest rate, and term to see your payment and maximum borrowing power.
Frequently asked questions
What is the difference between a home equity loan and a HELOC?
A home equity loan gives you a lump sum at a fixed rate — predictable monthly payments. A HELOC (Home Equity Line of Credit) is a revolving credit line with a variable rate. HELOCs suit ongoing expenses; home equity loans suit one-time large purchases.
What LTV limit should I expect?
Most lenders allow a combined LTV (primary mortgage + home equity loan) of 80–85%. Some credit unions go to 90%. A lower combined LTV means better rates and easier approval. Use 80% for a conservative estimate.
Is home equity loan interest tax-deductible?
In the US, interest is deductible only if the loan proceeds are used to buy, build, or substantially improve the home securing the loan (post-2017 Tax Cuts and Jobs Act). Using funds for debt consolidation or personal expenses is not deductible. Consult a tax advisor.
What happens if home prices fall?
If your home's value drops, your equity shrinks and you may become "underwater" — owing more than the home is worth. Lenders can freeze or reduce an outstanding HELOC in this scenario. A fixed home equity loan balance is unaffected, but selling the home would not cover the debts.
Home equity loans: borrowing against your home
How lenders calculate maximum borrowing
Lenders use the combined loan-to-value (CLTV) ratio: (primary mortgage + new loan) ÷ home value. At an 85% CLTV cap on a $400,000 home with a $200,000 mortgage: maximum CLTV balance = $340,000; available to borrow = $340,000 − $200,000 = $140,000. Your actual approved amount may be lower based on income, credit score, and debt-to-income ratio.
Best uses for home equity funds
Home improvements offer the best return — they can increase the home's value and may qualify for a tax deduction. Debt consolidation is popular but risky: you convert unsecured debt (credit cards) into secured debt (your home). Defaulting on a home equity loan can result in foreclosure, so only consolidate if you have strong repayment confidence.
Fixed-rate home equity loan vs adjustable HELOC
In a rising-rate environment, locking in a fixed rate via a home equity loan protects you from payment increases. In a falling-rate environment, a HELOC allows you to benefit from rate drops. For large, defined expenses (renovation project, down payment on a second home), a fixed loan simplifies budgeting.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →