Home Equity Loan Calculator
What is a Home Equity Loan Calculator?
Home equity is the difference between what your home is worth and what you still owe on your mortgage. A home equity loan lets you borrow against that equity in one lump sum with a fixed interest rate, repaid in fixed monthly payments. This calculator estimates your available equity, a typical maximum loan amount, and your monthly payment.
Enter your home value, your remaining mortgage balance, the loan amount you want, the interest rate and term. The calculator also shows your combined loan-to-value (LTV) — the ratio banks use to decide how much they will lend. Most lenders want your total borrowing (mortgage plus home equity loan) to stay at or below 80-85% of the home value.
Frequently Asked Questions
How much equity can I borrow?
Most lenders let you borrow up to 80-85% of your home value, minus your outstanding mortgage balance. For example, with a $400,000 home and a $200,000 mortgage, 80% of the value is $320,000, leaving about $120,000 of usable equity.
What is the difference between a home equity loan and a HELOC?
A home equity loan gives you the full amount upfront with a fixed rate and fixed payments, like a second mortgage. A HELOC (home equity line of credit) works like a credit card: you draw what you need from an approved limit and pay interest only on what you use, usually at a variable rate.
Do home equity loans require PMI?
No, home equity loans do not require private mortgage insurance (PMI). Your original mortgage may still have PMI if your total LTV is above 80%. Check with your lender, since a new home equity loan can affect whether PMI is required.
Can I deduct home equity loan interest?
In the US, interest on home equity debt is tax-deductible if the loan is used to buy, build or substantially improve your home. Interest on loans used for other purposes, such as paying off credit cards, is generally not deductible since the 2018 tax law changes.