Use the calculator below to estimate the maximum home equity loan amount you may be able to borrow, based on the value of your home, your remaining mortgage balance, and the loan-to-value (LTV) ratio acceptable by the lender.
A home equity loan calculator allows you to estimate your monthly payments and borrowing limit. It uses factors such as the loan amount, interest rate, and repayment term to perform those calculations. You just have to put in those details and hit the "Calculate" button. As a result, you will have a clear picture of your loan in front of you. You can explore and compare different scenarios before signing a specific agreement. It also helps you understand how changing the associated costs affects your monthly payments.
A home equity loan is a specific type of loan that allows homeowners to borrow money depending on the equity in their homes. This home equity acts as collateral. In this type of loan, the borrower receives a lump sum upfront. He then repays this amount via regular monthly payments. These loans are usually accompanied by fixed interest rates. It means the monthly payments remain the same throughout the repayment term. Home equity loans generally have lower interest rates, as these loans are secured by personal property.
You can calculate the equity of your home using the following formula:
Home Equity: Market Value of the Property - Remaining Mortgage
The following example uses supposed values to educate you on how exactly you can calculate the equity of your home. Our calculator does this job in seconds, with 100% precision.
The result value presents the portion of your home that you own. The lenders usually don’t allow the borrowers to use 100% of their equity. Instead, they limit it so that the combined loan-to-value ratio (LTV) is around 80% of the home's value.
The individual borrowing limits depend on multiple factors, as mentioned in the following sections. On average, you can borrow around 80% to 85% of the total home’s value, including the remaining mortgage.
In this example, we have also used supposed values.
Suppose your remaining mortgage balance is $230,000. The home equity loan amount in this case would be: $400,000 − $230,000 = $170,000. This is the amount that you can borrow directly from the lender.
A home equity loan calculator uses three basic factors to calculate monthly payments:
The calculator uses these values to show you how your monthly payments would fluctuate based on the variation in the cost and duration.
If you fulfill those requirements, there are increased chances that you will qualify for the loan.
These costs typically range from 2% to 5% of the loan amount. There are also ongoing costs such as interest payments.
| Features | Home Equity Loan | HELOC |
|---|---|---|
| Interest Rate | Fixed | Usually variable |
| Payment Structure | Fixed monthly payments | Payments may change |
| Access to Funds | Lump sum upfront | Borrow as needed |
| Repayment | Begins immediately | Draw period followed by repayment |
A home equity loan is best for one-time expenses, while a HELOC is ideal for ongoing or flexible spending needs.
Enter your details in the calculator above to see a precise estimate of your monthly payments in seconds. You can also use our HELOC calculator to compare it with a home equity loan.