Calculate monthly payments on a home equity loan. Borrow against your home equity at a fixed rate.
Our free home equity loan calculator estimates your monthly payment on a lump-sum home equity loan based on your home's value, existing mortgage balance, and the amount you want to borrow. It also checks your available equity and combined loan-to-value (CLTV) ratio, key numbers lenders use to approve home equity loans.
Available Equity = (Home Value × Maximum LTV%) − Existing Mortgage Balance. Most lenders cap total borrowing (mortgage plus home equity loan) at 80-85% of your home's value.
Monthly Payment = L × [ i(1 + i)^n ] / [ (1 + i)^n − 1 ], where L is the loan amount, i is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (loan term in years × 12). Unlike a HELOC, a home equity loan gives you the full amount upfront with a fixed rate and fixed monthly payment.
Most lenders require you to retain at least 15-20% equity in your home after the loan, meaning your total borrowing (existing mortgage plus new loan) typically can't exceed 80-85% of your home's value.
A home equity loan gives you a lump sum upfront with a fixed interest rate and fixed monthly payments. A HELOC (home equity line of credit) works more like a credit card, letting you draw funds as needed up to a limit, usually with a variable interest rate.
Interest may be tax-deductible if the loan is used to buy, build, or substantially improve the home that secures the loan, subject to IRS mortgage interest deduction limits. Consult a tax professional for your specific situation.
Common uses include home renovations, debt consolidation, major purchases, and education expenses. Since your home secures the loan, lenders don't restrict how you use the funds, but failure to repay puts your home at risk.