Home Equity Loan Calculator
A home-equity loan is a fixed-rate second mortgage. Enter your home value and what you still owe to see how much you can borrow, then the monthly payment and total interest on the amount you take.
How the home equity loan calculator works
A home equity loan is a fixed-rate second mortgage that hands you a single lump sum, repaid in equal monthly installments over a set term. Unlike a revolving HELOC, you borrow once and the rate and payment never change, which makes budgeting predictable.
How much you can borrow depends on your equity — the home's value minus what you still owe — bounded by the lender's combined loan-to-value limit. It suits one-time, defined expenses like a renovation or debt consolidation. This calculator estimates the equity available to borrow, the fixed monthly payment, and the total interest you will pay across the life of the loan.
Worked example: with home value of $450,000, balance owed (1st mortgage) of $260,000 and max combined ltv allowed of 85.00%, the home equity loan calculator shows available home equity of $122,500.
- Monthly payment
- $582.08
- Total interest
- $44,775
- Total of payments
- $104,775
- New combined LTV
- 71.1%
| Amount to borrow | Available home equity |
|---|---|
| $25,000 | $122,500 |
| $50,000 | $122,500 |
| $100,000 | $122,500 |
| $150,000 | $122,500 |
The formula
Borrowable equity equals the home value times the lender's combined LTV limit, minus the existing first-mortgage balance. The fixed monthly payment comes from the standard amortization formula applied to the loan amount at the fixed rate over the chosen term. Total interest is the payment times the number of payments, less the principal.
- The amount you can borrow is capped by the combined loan-to-value limit across your first mortgage and this loan.
- A fixed rate and fixed term are assumed, so the monthly payment stays constant for the entire loan.
- Total interest assumes the loan is held to term; prepaying principal would reduce the interest you actually pay.
- Closing costs, appraisal fees, and any origination charges are not folded into the payment or interest figures.
- The loan sits in second-lien position, which typically means a higher rate than a comparable first mortgage.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender or a licensed advisor.
Questions about the home equity loan calculator
How is a home equity loan different from a HELOC?
A home equity loan gives you a fixed lump sum at a fixed rate with a steady payment — you borrow once and know the cost upfront.
A HELOC is a revolving line with a variable rate; you draw as needed and payments fluctuate. Choose the loan for a known one-time expense and predictability, and the HELOC for ongoing or uncertain needs where flexibility matters more.
Why does a home equity loan usually cost more than my first mortgage?
It sits in second-lien position. If the home is ever sold in foreclosure, the first mortgage is repaid before the equity loan sees a dollar, so the second lender takes on more risk and prices a higher rate to compensate.
Your equity loan rate also reflects current market conditions and your credit, but the subordinate position is the structural reason it runs higher.
Can I deduct the interest on a home equity loan?
Sometimes. Under current federal rules, interest on a home equity loan is generally deductible only when the proceeds are used to buy, build, or substantially improve the home securing the loan, and only within overall mortgage-debt limits.
Using the funds for other purposes, such as paying off credit cards, typically makes the interest non-deductible. Confirm your situation with a tax professional before relying on a deduction.
Is the Home Equity Loan Calculator free to use?
Yes. Every calculator on MortgageLoansCalculator is completely free, with no sign-up, login or paywall. Run as many scenarios as you like.
How does a home equity loan work?
You borrow a lump sum against your equity as a fixed-rate second mortgage and repay it in equal installments over a set term, on top of your first mortgage.
The rate and payment are locked, so the cost is predictable from day one.
HELOC or home equity loan — which is better?
A HELOC is a revolving, variable-rate line for ongoing or uncertain costs; a home equity loan is a fixed lump sum for a one-time expense with a known price. If you want a predictable payment, the fixed loan wins.
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