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Home Equity Loan Calculator illustration

Home Equity Loan Calculator

Work out your home equity loan payment, how much you can borrow at your lender’s combined loan-to-value cap, total interest, and both loans together.

FinancialWorks without JavaScriptReviewed 2026-08-18

Inputs

Your numbers

What the home would appraise for today, not what you paid for it.

Unpaid principal from your latest statement. Enter 0 if the home is owned outright.

Principal and interest only. Used to show what the two loans cost together.

All liens count toward this ceiling — the first mortgage plus the new loan.

The lump sum you want. Ask for more than the cap allows and the result says so.

The fixed note rate on the equity loan, not the APR.

Closed-end second mortgages are commonly written for 5 to 30 years.

Try an example

Result

Enter your values and press Calculate to see the result here.

Formula verified against What you should know about home equity lines of credit (HELOC) from Consumer Financial Protection Bureau (published under 15 U.S.C. 1637a(e) and 12 CFR 1026.40(e)). Last checked 2026-08-18.

Built and maintained by Eddy Bo, founder of CalcVerdict.

How does this calculator work?

A home equity loan is a closed-end second mortgage. The whole sum is advanced once, the rate is fixed, and a level payment retires the balance by the end of the term — the CFPB’s home equity booklet summarises it as "equal payments that pay off the entire loan". Nothing revolves and there is no draw period, so the arithmetic is an ordinary amortizing loan sitting behind an existing first mortgage. The constraint, and the reason this is not just a loan calculator, is combined loan-to-value. Every lien on the property counts. The Interagency Guidelines for Real Estate Lending Policies (12 CFR Part 34, Subpart D, Appendix A) are explicit that the total amount of all senior liens must be included when determining the loan-to-value ratio, so your borrowing capacity is home value times the lender’s maximum CLTV percentage, minus the first-mortgage balance, floored at zero. Those same guidelines set a supervisory loan-to-value limit of 85 percent for improved property, which is why quoted second-mortgage programmes cluster at 80 to 85 percent rather than anywhere lenders please. At or above 90 percent combined, the guidelines tell an institution to require credit enhancement — mortgage insurance or readily marketable collateral — and this calculator flags that threshold explicitly, because in practice it shows up as a higher rate, an added insurance cost, or a decline. The payment comes from the Regulation Z Appendix J annuity relation, M = P·i(1+i)^n / ((1+i)^n − 1), with the monthly rate taken as the annual rate divided by 1,200 per Appendix J(b)(1). The schedule is then walked month by month, rounding each month’s interest to the cent before subtracting it from the payment, and the final payment absorbs the accumulated rounding drift so the balance lands on exactly zero. That is why the total interest here differs by a dollar or two from n·M − P: it matches the statement a servicer would actually send. Equity is reported separately from capacity, and unlike capacity it is deliberately not floored at zero. An underwater home has negative equity and saying so is more useful than showing a blank. Request more than the cap allows and the result tells you by how much, but it still prices the amount you entered rather than silently shrinking it, so you can see what closing the gap would cost. The non-obvious part is where the real decision lives. Because a second mortgage keeps your first mortgage untouched, people evaluate it on the second payment alone. The figure that matters is the combined monthly outlay of both loans, which is why the current mortgage payment is an input here. A 15-year second at 8.25 percent carries a payment far heavier per dollar borrowed than a 30-year first, so a modest lump sum can add more to your monthly obligation than the original mortgage did per dollar of principal. If your first mortgage rate is close to today’s rates, folding everything into one loan through a cash-out refinance may beat two liens; if it is well below market, keeping it and taking a second is usually the cheaper trade. Two exclusions to hold in mind. Closing costs, appraisal fees, annual fees and any prepayment charge are not in these figures, so the APR your lender discloses will exceed the note rate you entered — an APR calculator converts between the two. And interest is deductible only to the extent the money buys, builds or substantially improves the home securing it, within the acquisition-debt limits in IRS Publication 936, so no tax benefit is assumed anywhere above. If you would rather borrow in stages at a variable rate than take the money in one piece, a HELOC is the structure to compare against.

What questions do people ask about this calculator?

How much can I borrow with a home equity loan?

The CFPB describes the limit on a second mortgage or home equity loan as “generally a percentage of the appraised value of your home, minus the amount you owe on your mortgage.” So take the home’s value, multiply by the lender’s maximum combined loan-to-value, and subtract the first-mortgage balance. On a $400,000 home with a $250,000 mortgage and an 85% cap that is $340,000 − $250,000 = $90,000. If the first mortgage already uses the whole allowance, the answer is zero rather than a negative number, and the calculator says so.

What is the difference between a home equity loan and a HELOC?

A home equity loan is closed-end: you receive the entire amount once, at a fixed rate, and repay it on level payments that retire the balance by the end of the term. A HELOC is open-end and revolving — you draw, repay and redraw during a draw period, usually at a variable rate, and the payment moves with the balance and the index. The CFPB lists both as second mortgages and distinguishes them exactly this way. Pick the loan when you know the amount and want a payment that cannot change; pick the line when the spending is staged or uncertain.

Why does the first mortgage reduce what I can borrow?

Because the ceiling is a COMBINED loan-to-value. The federal Interagency Guidelines for Real Estate Lending Policies define the ratio so that “the total amount of all senior liens on or interests in such property(ies) should be included,” and a home equity loan sits behind the first mortgage in line. The lender is sizing every lien against one appraisal, so every dollar still owed on the first mortgage is a dollar of allowance already spent.

Is the interest on a home equity loan tax deductible?

Only sometimes, and it does not depend on the loan being labelled a home equity loan. IRS Publication 936 states that “you can no longer deduct the interest from a loan secured by your home to the extent the loan proceeds weren’t used to buy, build, or substantially improve your home,” and the deduction applies to the first $750,000 of home acquisition debt ($375,000 if married filing separately), with higher limits for debt incurred before 16 December 2017. Proceeds used to consolidate credit cards or pay tuition do not qualify. This calculator reports no tax benefit; talk to a tax adviser.

What happens if I ask for more than the calculator says I can borrow?

The payment figures still price exactly the amount you entered, and a note tells you it is above the maximum at that combined loan-to-value. That is deliberate: quietly shrinking the loan would hide the gap you actually need to close, whether by taking a smaller loan, finding a lender with a higher cap, or waiting for the balance to fall. The combined loan-to-value shown alongside tells you how far over you are.

Can I lose my home over a home equity loan?

Yes. The loan is secured by the house — that is what makes the rate lower than an unsecured personal loan. The CFPB is blunt about it: if you cannot repay a home equity loan or line of credit, “you could potentially lose your home because you are using the equity in your home as collateral.” Consolidating unsecured debt into a home equity loan does not erase the debt; it moves it behind a lien on your house.

Why does the total interest differ slightly from payment times term?

Because a servicer bills in whole cents. Each month’s interest is rounded to the cent before it is subtracted from the balance, which is what Regulation Z requires the periodic statement to show, so the running total drifts a dollar or two away from the closed-form figure over a long term. The final payment then absorbs the difference so the balance lands on exactly zero. This calculator follows the statement, not the textbook.

What combined loan-to-value will a lender actually allow?

It varies by lender and by credit profile, but the federal supervisory guidance is a useful anchor. The Interagency Guidelines set a supervisory loan-to-value limit of 85% for improved property, and note that for an owner-occupied one-to-four family home equity loan “with a loan-to-value ratio that equals or exceeds 90 percent at origination, an institution should require appropriate credit enhancement in the form of either mortgage insurance or readily marketable collateral.” That is why 80% and 85% caps are the common quotes and why going past 90% gets expensive.

Sources