How this calculator works
A home equity loan is a second mortgage: a single lump sum secured by the equity in your home, repaid with a fixed rate and a fixed monthly payment from the first month. This calculator estimates how much you could borrow under a combined loan-to-value limit, then computes the fixed payment and full year-by-year amortization schedule for the amount you actually want to borrow.
Because the rate and payment are fixed at closing, a home equity loan behaves exactly like the mortgage or car loan calculators on this site — the same standard amortization formula applies, just against your home's equity instead of the full purchase price.
The formulas
Maximum borrowable = (home value × max combined LTV%) − existing mortgage balanceFixed monthly payment: M = P × i ÷ (1 − (1 + i)^−n)P is the loan amount, i the monthly rate (annual rate ÷ 12), and n the loan term in months. This is the same standard amortization formula used throughout the site's mortgage and loan calculators.
Worked example: $400,000 home, $250,000 mortgage, $60,000 loan at 7% over 10 years
- Maximum combined debt at 85% LTV = 400,000 × 0.85 = $340,000; subtract the $250,000 mortgage for an estimated maximum of $90,000.
- For the requested $60,000 loan, monthly rate i = 0.07 ÷ 12 ≈ 0.005833.
- Fixed payment = 60,000 × i ÷ (1 − (1+i)^−120) ≈ $696.65 a month over 120 months.
- Total paid = 696.65 × 120 ≈ $83,598; total interest = 83,598 − 60,000 ≈ $23,598.
Frequently asked questions
How is a home equity loan different from a HELOC?
A home equity loan gives you one lump sum with a fixed rate and a fixed payment from day one, fully amortizing over a set term. A HELOC is a revolving credit line you can draw from and repay repeatedly, typically with a variable rate and an interest-only draw period — see the HELOC calculator to compare the two side by side.
Why does the calculator ask for a combined loan-to-value limit?
Lenders size home equity loans against how much total debt (your existing mortgage plus the new loan) the home's value can support. 85% is a commonly used ceiling, but it varies by lender, credit profile and loan program — adjust it to match an actual offer.
What happens if I request more than the estimated maximum?
The calculator still computes the payment and schedule for whatever amount you enter, but flags when it exceeds the estimated maximum based on your home value, mortgage balance and LTV limit — a real lender would likely require more equity or a higher LTV allowance to approve it.
Is the rate really fixed for the whole loan?
Most home equity loans use a fixed rate for the full term, unlike a HELOC's typically variable rate. Confirm with your specific loan offer, since some lenders also offer variable-rate home equity loans.
Does this include closing costs?
No — it calculates the loan payment and amortization on the principal amount only. Home equity loans often carry closing costs similar to a first mortgage (appraisal, origination, title fees), which are a separate upfront cost to factor into your decision.