Home Equity Loan Calculator
Estimate your monthly home equity loan payment and total cost of borrowing. This calculator handles fixed-rate home equity loans, lump-sum second mortgages, and any fixed-rate borrowing against your home equity.
Amortization Schedule
How Much Home Equity Do You Have?
Your home equity depends on your home's current market value and what you owe. Lenders use loan-to-value (LTV) and combined loan-to-value (CLTV) ratios to decide how much you can borrow. Most home equity loans require CLTV below 80% – 85%.
CLTV (combined loan-to-value) adds your new home equity loan to your existing first mortgage and divides by home value. Most banks cap CLTV at 80% – 85% for home equity loans and 85% – 90% for HELOCs. If your CLTV exceeds the limit, you may need to wait until you've paid down the first mortgage or your home appreciates further.
Understanding Home Equity Loans
A home equity loan is a fixed-rate second mortgage that lets you borrow a lump sum against the portion of your home you own free and clear — your equity. You receive the full amount at closing and repay it with predictable monthly payments over a set term, typically 5 to 30 years. Because the loan is secured by your home, interest rates are usually 2 – 5 percentage points lower than credit cards and unsecured personal loans. Interest on home equity loans used for "substantial home improvement" may be tax-deductible under the Tax Cuts and Jobs Act — consult IRS Publication 936 and a tax advisor for your situation.
Home Equity Loan vs HELOC vs Cash-Out Refinance
| Feature | Home Equity Loan | HELOC | Cash-Out Refi |
|---|---|---|---|
| Funds | Lump sum | Revolving credit | Lump sum |
| Rate type | Fixed | Variable (usually prime + margin) | Fixed or adjustable |
| Payments | Fixed monthly | Interest-only in draw, then amortizing | Fixed monthly (replaces old mortgage) |
| Typical term | 5 – 30 years | Draw 10yr + Repay 20yr | 15 – 30 years |
| Replaces first mortgage? | No | No | Yes |
| Closing costs | Low (0% – 2%) | Low (often $0 – $500) | Full mortgage closing (2% – 5%) |
| Max CLTV typical | 80% – 85% | 85% – 90% | 80% (conventional) / 96.5% (FHA) |
How to Calculate Home Equity
Home equity = current market value of the home minus everything you owe against it. For example: a $500,000 home with a $300,000 first mortgage has $200,000 in equity. That's an LTV of 60% on the first mortgage. If you take out a $50,000 home equity loan, your combined LTV (CLTV) climbs to 70% — still well within most lender limits. The home equity loan calculator above handles the payment math; use the LTV calculator further up the page to confirm how much you can borrow.
Typical Home Equity Loan Rates in 2026
Home equity loan rates typically track 1 – 2 percentage points above the 10-year Treasury yield, adjusted for the lender's risk and the borrower's credit profile. As of early 2026, APRs for borrowers with 700+ credit scores range from approximately 7.5% to 9.5%, with lower rates reserved for shorter terms (5 – 10 years) and CLTVs under 70%. Rates for borrowers with 620 – 680 credit scores may run 9% – 12%. HELOC rates are usually tied to the prime rate (currently 8.5%) plus a margin based on credit score and CLTV.
When a Home Equity Loan Beats Other Options
- Fixed-rate certainty matters. You want predictable payments and protection from rate increases.
- You know the exact amount needed. Major renovation, medical bill, or one-time purchase with a known price tag.
- Your first-mortgage rate is lower than current rates. A cash-out refinance would force you to give up a low rate on the first mortgage — a home equity loan keeps it intact.
- You're consolidating higher-interest debt. Credit cards at 22% APR replaced by a home equity loan at 8.5% saves thousands per year.
For strategies on paying down either your first mortgage or a home equity loan faster, see our loan payoff strategies guide and the amortization guide.
Closing Costs and Fees
Home equity loans carry lower closing costs than first mortgages — typically 0% – 2% of the loan amount, sometimes waived entirely by lenders in exchange for a slightly higher rate. Common fees include appraisal ($300 – $600), title search ($200 – $400), origination fee (0% – 1%), and recording fees ($50 – $200). Some lenders charge an early-closure fee if you pay off the loan within 2 – 3 years. Always request a Loan Estimate from at least three lenders to compare line by line. Learn more in our closing costs guide.
Before choosing any home equity product, consider the risks carefully. Your home serves as collateral, meaning you could lose it if you cannot make payments. For other financing needs, explore our mortgage calculators, business loan calculators, or return to the main loan calculator.
Sources & Editorial Standards
Our HELOC calculator models the two-phase structure most common in the U.S. market: an interest-only draw period (typically 5–10 years) followed by a fully amortizing repayment period (10–20 years). The draw period calculation is simply principal × (annual rate / 12); the repayment period uses the standard amortization formula M = P × [r(1+r)n] / [(1+r)n − 1]. We do not model variable-rate HELOCs that reset with the prime rate on a specific schedule — instead, you can run the calculator at multiple rate scenarios (e.g., today's rate, +2%, +4%) to see the range of possible repayment payments. Cash-out refinance and fixed-rate home equity loan calculators are planned but not yet shipping; we will not publish them until the math matches lender disclosures exactly.
Primary sources we rely on for home equity data and consumer guidance:
- CFPB — What is a HELOC? — federal definition, draw period rules, and repayment-phase disclosures.
- CFPB Housing Data — aggregate home equity trends and aggregate HELOC utilization.
- Federal Reserve Senior Loan Officer Opinion Survey (SLOOS) — quarterly HELOC lending standards and tightening trends.
- HUD-approved Housing Counselors — free or low-cost guidance for homeowners comparing equity options.
Spotted a wrong number or broken citation? Email admin@loancalculatorpro.online — we acknowledge verified errors within 48 hours. See our editorial standards and correction policy for details.