Home Equity Loan Calculator
Calculate your available home equity and estimate loan payments
Calculate how much equity you can borrow against your home.
Home Equity Loan (HEL)
Fixed rate, lump sum payment. Best for one-time expenses like renovations. Predictable monthly payments.
HELOC (Line of Credit)
Variable rate, draw as needed. Best for ongoing expenses. More flexible but rates can change.
How to Use This Home Equity Loan Calculator
- Enter your home's current market value (check recent comparable sales)
- Input your remaining mortgage balance
- Set the maximum combined LTV your lender allows (typically 80-85%)
- View your available borrowing power based on equity
- Switch to the Payment tab to calculate monthly payments on a specific loan amount
- Compare the interest rate and term to see total borrowing costs
Example: Home worth $500,000 with $280,000 mortgage balance. At 80% max LTV: $500,000 × 80% = $400,000 max total debt. $400,000 - $280,000 = $120,000 available to borrow. At 8.5% for 10 years, a $75,000 loan = $929/month, $36,480 total interest.
Tip: Get your home professionally appraised before applying—your borrowing limit depends on current value, not what you paid or what Zillow estimates.
Why Use a Home Equity Loan Calculator?
Home equity is one of the cheapest ways to borrow, but it puts your house at risk. Understanding exactly how much you can access and what it costs helps you make informed decisions.
- Calculate how much equity you can actually borrow against
- Compare home equity loan vs. HELOC for your needs
- Determine monthly payments for different loan amounts and terms
- See the total cost of borrowing against your home
- Evaluate whether home equity is better than other financing options
- Plan renovations or major expenses using available equity
Understanding Your Results
Focus on both available equity and the cost of borrowing. Low rates are attractive, but you're pledging your home as collateral.
| Result | Meaning | Action |
|---|---|---|
| Current LTV under 60% | Substantial equity | You have significant borrowing power if needed |
| Current LTV 60-75% | Moderate equity | Some borrowing room available; use judiciously |
| Current LTV 75-80% | Limited equity | Little room to borrow; focus on building more equity first |
| Current LTV over 80% | Low/no available equity | Most lenders won't approve additional home-secured borrowing |
Meaning: Substantial equity
Action: You have significant borrowing power if needed
Meaning: Moderate equity
Action: Some borrowing room available; use judiciously
Meaning: Limited equity
Action: Little room to borrow; focus on building more equity first
Meaning: Low/no available equity
Action: Most lenders won't approve additional home-secured borrowing
Note: Home equity rates in 2026 average 8-10% for fixed loans, 7-9% for HELOCs. Rates vary significantly by credit score, LTV, and lender.
About Home Equity Loan Calculator
Formula
Available Equity = (Home Value × Max LTV%) - Mortgage Balance Max LTV is typically 80-85% for home equity products. This means total debt (first mortgage + home equity loan) can't exceed 80-85% of home value. Some lenders go to 90% but charge higher rates.
Current Standards: Home equity loan rates 2026: 8-10% APR typical. HELOC rates: Prime + 0-2% (currently 7.5-9.5%). Closing costs: 2-5% of loan amount. Tax deductibility: Interest may be deductible if funds used to 'buy, build, or substantially improve' the home.
Frequently Asked Questions
What's the difference between a home equity loan and HELOC?
Home equity loan: lump sum, fixed rate, fixed payments—like a traditional mortgage. Best for one-time expenses (renovation, debt consolidation). HELOC: revolving credit line, usually variable rate, draw as needed during a draw period (typically 10 years), then repay over 10-20 years. Best for ongoing expenses or when you're not sure how much you'll need. HELOCs are more flexible but rates can rise.
Is home equity loan interest tax deductible?
Under current law (post-2017 Tax Cuts and Jobs Act), home equity interest is only deductible if the funds are used to 'buy, build, or substantially improve' the home securing the loan. Using equity for debt consolidation, education, or other purposes? The interest is NOT deductible. Keep documentation of how funds were spent. Consult a tax professional for your specific situation.
What are the risks of borrowing against my home?
The biggest risk: foreclosure if you can't make payments. You're converting unsecured debt (which can be discharged in bankruptcy) into secured debt backed by your home. Other risks: if home values drop, you could owe more than the home is worth; variable HELOC rates can spike, increasing payments; closing costs add to your debt. Never borrow against your home for non-essential spending.
How much home equity can I actually borrow?
Most lenders cap combined loan-to-value (CLTV) at 80-85%. If your home is worth $400,000 and you owe $250,000, at 80% CLTV you can borrow up to $70,000 ($400,000 × 80% - $250,000). Some lenders go to 90% CLTV but charge significantly higher rates. Your actual approval depends on credit score, income, debt-to-income ratio, and the lender's requirements.
Should I use home equity to pay off credit cards?
It can make mathematical sense—replacing 22% credit card debt with 8% home equity debt saves substantial interest. BUT: you're moving unsecured debt to secured debt, putting your home at risk. You haven't fixed the spending habits that created card debt. Many people consolidate, then run cards back up, ending up with BOTH home equity debt AND credit card debt. Only consolidate if you commit to never carrying credit card balances again.