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Finance

Home Equity Loan Calculator

Calculate your home equity loan monthly payment, available equity, and total interest.

What is Home Equity Loan Calculator?

A home equity loan calculator helps homeowners estimate the monthly payment on a fixed-rate lump-sum loan secured by their home equity. Lenders typically allow you to borrow up to 85% of your home's value minus your outstanding mortgage balance.

How to use

  1. 1 Enter your home's current market value.
  2. 2 Enter your current mortgage balance.
  3. 3 Enter the loan amount you want to borrow.
  4. 4 Enter the annual interest rate and loan term.
  5. 5 See your monthly payment, available equity, and total interest cost.

Formula

Available equity = home value × 85% − mortgage balance. Monthly payment = P × r(1+r)ⁿ / [(1+r)ⁿ − 1], where P = loan amount, r = monthly rate, n = months.

Example calculation

Home value $400,000, mortgage balance $200,000. Available equity = $340,000 − $200,000 = $140,000. Borrow $50,000 at 8.5% for 10 years: monthly payment ≈ $620. Total interest ≈ $24,400.

Frequently asked questions

How is a home equity loan different from a HELOC?

A home equity loan gives you a lump sum at a fixed rate — your payment stays the same every month. A HELOC is a revolving line of credit with a variable rate, like a credit card secured by your home.

What credit score do I need?

Most lenders require a credit score of at least 620–680 for a home equity loan. Better scores qualify for lower rates. Lenders also look at your debt-to-income ratio and loan-to-value ratio.

Can I borrow 100% of my equity?

Most lenders cap your combined loan-to-value (CLTV) at 80–85% of your home's value. So if your home is worth $400,000, total debt (mortgage + equity loan) shouldn't exceed $340,000.

Is home equity loan interest tax deductible?

Interest is deductible only if the loan is used to buy, build, or substantially improve your home. Interest used for debt consolidation or other purposes is not deductible under current tax law.

What are typical home equity loan rates?

Rates typically run 1–3% higher than first mortgage rates. In 2024–2025, rates ranged from 7–10% depending on credit score, LTV, and lender.