Home Equity Loan Calculator – Estimate Monthly Payments
Calculate payments on a fixed-rate home equity loan and the equity you can tap.
About the Home Equity Loan Calculator
What is the Home Equity Loan Calculator?
A home equity loan calculator shows how much you can borrow against your home and the fixed monthly payment on that second mortgage.
Why use this calculator?
Home equity often carries a lower rate than unsecured debt, making it attractive for consolidating balances or funding renovations. But your home secures the loan, so default risks the property.
How to use it
- Enter your home value and current mortgage balance.
- Set the maximum loan-to-value ratio your lender allows.
- Enter the amount you want to borrow, the rate and the term.
- Review the available equity and the monthly payment.
Formula
Available equity = (Home value × max LTV) − current mortgage balance
Lenders typically allow a combined loan-to-value of 80% to 85%. Closing costs may apply.
Frequently Asked Questions
How much can I borrow against my home?
The difference between your home value times the lender maximum LTV and your current mortgage balance. A higher LTV limit means more access but more risk.
Is home equity loan interest tax deductible?
In some jurisdictions interest is deductible when the funds are used to buy, build or substantially improve the home. Confirm the rules with a tax professional.
What is included in a monthly mortgage payment?
Most payments combine principal, interest, property taxes and homeowners insurance (often called PITI). Some loans also include private mortgage insurance (PMI).
What is PMI and when can I drop it?
Private mortgage insurance is usually required when your down payment is under 20%. You can typically request removal once you reach 20% equity.
Fixed versus adjustable rate — which is better?
A fixed rate keeps the same interest rate for the whole term, giving predictable payments. An adjustable rate starts lower but can rise after the initial period.
How much house can I afford?
A common guideline is that housing costs stay below 28% of gross monthly income and total debt below 36%, though lenders and budgets vary.
What is the difference between pre-qualification and pre-approval?
Pre-qualification is a quick estimate based on self-reported data. Pre-approval is a verified commitment after a lender reviews your finances.
What is a credit utilization ratio?
It is the share of your available credit that you are using. Keep it below 30%, and ideally below 10%, to protect your credit score.
Will paying off a card hurt my score?
No. Paying down balances usually helps your score by lowering utilization. Closing the account, however, can reduce your available credit.
What is the minimum payment trap?
Minimum payments are set low, so most of the payment goes to interest and the balance lingers for years. Paying more than the minimum saves substantial interest.