Home Equity Loan Calculator

This page has two home equity loan tools. The first works out the monthly payment and total cost of a home equity loan, including closing costs and APR. The second estimates how much you might qualify to borrow, based on your home value, your remaining mortgage, and the loan-to-value limit your lender allows. Both are built for U.S. borrowers.

What a home equity loan is

A home equity loan, sometimes called a second mortgage, is a one-time installment loan secured by your home. You receive a lump sum at closing and repay it over a fixed term, almost always at a fixed rate with a fixed monthly payment. Because your home backs the loan, the rate is usually lower than a credit card or personal loan. The fixed rate and set payment are the main appeal: you know exactly what you owe each month and when the loan ends. That predictability is the clearest difference from a HELOC, whose rate and payment can move over time.

How much you can borrow

Because the loan is secured by your home, lenders cap it at a share of the home's value, and that cap counts your existing mortgage. The common limit is 80% of the home's value minus what you still owe. On a $500,000 home with a $230,000 mortgage, an 80% loan-to-value limit gives $500,000 × 80% − $230,000 = $170,000. Some lenders allow 70%, 85%, or even 90%, and most also set an absolute ceiling, often around $1 million. The second calculator on this page runs that math for any home value, balance, and LTV.

Home value is only the first test. Lenders also weigh your credit history, and a score under about 630 often will not qualify. Your other debts matter too: a high debt-to-income ratio, in the 43% to 50% range or above, can sink the application. The condition of the home, existing liens, and insurance can all factor in. The Debt-to-Income Ratio Calculator shows where you stand.

What a home equity loan costs

A home equity loan carries two kinds of cost. Upfront or closing costs include origination, appraisal, document, and title-search fees, often 2% to 5% of the loan, which can be paid at closing or rolled into the balance. Many lenders offer a no-closing-cost option, but it usually comes with a higher rate and penalties for paying the loan off early. Ongoing costs are mostly the interest built into each payment: early on, more of the fixed payment goes to interest, and as the balance falls more goes to principal. Some lenders add recurring fees or require insurance, especially at high loan-to-value ratios.

Because rates and upfront costs vary so much between lenders, comparing offers by interest rate alone is misleading. The first calculator can include closing costs, and the annual percentage rate (APR) it reports rolls the interest and closing costs into one yearly figure, which is the fairer way to line up competing loans.

Home equity loan vs HELOC

The two are easy to confuse. A home equity loan gives you the whole amount at once, at a fixed rate, repaid on a set schedule, which suits a known cost. A HELOC gives you a credit limit you draw against during a draw period, usually at a variable rate, which suits spending that comes in stages. If you need a specific sum and value a predictable payment, the loan fits; if you want flexibility and can handle a moving rate, the line fits. Run both and compare the total cost with our HELOC Calculator.

How people use a home equity loan, and the alternatives

A home equity loan suits a planned, one-time expense where you want a fixed rate and a steady payment. Common uses:

• Home improvements and repairs: a remodel, a new roof, or major maintenance that protects or raises the home's value.
• Debt consolidation: rolling high-interest credit card balances into a lower-rate loan to cut interest and simplify payments; our Debt Consolidation Calculator shows the effect.
• Education costs: tuition or training, though it is worth comparing against a student loan first.
• Large one-off bills: medical costs, a wedding, or funding a business.

Beyond a HELOC, one other home-backed option is worth weighing. A cash-out refinance replaces your existing mortgage with a larger one and hands you the difference in cash, which makes sense when today's rates are below your current mortgage rate; refinanced mortgage interest can also qualify for the itemized tax deduction, which home equity loan interest does not always. The Refinance Calculator covers that path. Used carefully, a home equity loan is a relatively low-cost way to borrow against your equity for a clear need with affordable payments. Because the loan is tied to your home, though, falling behind can put the house itself at risk, so weigh the full cost before you sign.

Why a second lien costs more

A home equity loan sits behind the first mortgage. If the property is ever sold in foreclosure the first lender is paid in full before the second sees anything, so the second lender prices that risk into the rate. This is why a home equity loan quote is higher than the rate on a first mortgage, and why the gap widens as the combined loan-to-value ratio rises.

What the ceiling actually leaves you

Lenders work to a combined loan-to-value limit, typically 80% to 85% across every loan on the property. Take a home appraised at $400,000 with $260,000 still owed. At 85%, total borrowing can reach $340,000, so the loan available is $80,000. The equity on paper is $140,000, and the gap between those two numbers is the part homeowners rarely expect. Falling values close it fast, since the ceiling is a percentage of today's appraisal rather than of what you paid.

Against a cash-out refinance

The alternative is replacing the first mortgage with a larger one and taking the difference in cash. Which is cheaper depends almost entirely on the rate you already hold. If your first mortgage was written at a low rate, a cash-out refinance reprices the whole balance at today's rate, and the extra interest on the original amount usually swamps the saving on the new money. A second loan leaves the first mortgage untouched, which is why home equity lending grew heavily among households holding low pandemic-era rates.

Closing costs favor the second loan as well. They are typically a fraction of a full refinance, and some lenders advertise no closing costs at all. Read the recapture clause when they do, since those costs are commonly charged back if the loan is repaid or closed within the first two or three years.

Tax treatment, and the risk that comes with the rate

Interest is deductible only when the borrowed money buys, builds or substantially improves the home that secures it, within total mortgage debt of $750,000 for joint filers or $375,000 filing separately. The One Big Beautiful Bill Act made that permanent on 4 July 2025. Consolidating card debt does not qualify, and the deduction requires itemizing at all, which is uncommon when the 2026 standard deduction is $32,200 for a couple and $16,100 for a single filer.

The reason the rate is lower than a personal loan is worth stating plainly: the house is the collateral. Moving unsecured card balances onto a home equity loan cuts the interest rate and converts a debt that could be settled or discharged into one that can cost you the property. That trade can be the right one, and it should be a deliberate decision rather than a side effect of chasing a lower payment.