Home Equity Loan Calculator: Borrowing Power and Payment

Home equity: The part of the home you own (estimated as home value minus what you still owe on loans secured by the home).

Home equity loan: A lump-sum loan you repay in equal monthly payments, usually with a fixed interest rate for the whole term.[2]

Annual interest rate (%): The contractual yearly interest rate (note rate) charged on the loan balance, used here to calculate fixed monthly principal-and-interest payments.

APR (annual percentage rate): A broader borrowing-cost measure that includes interest and certain fees for a closed-end home equity loan. It can differ from the note rate. This calculator accepts the note rate and handles the entered closing costs separately; it does not calculate APR.[4]

CLTV (combined loan-to-value): (Mortgage balance + other lien balances + new loan) divided by home value, shown as a percent.

Closing costs: One-time fees to set up the loan; they can be paid upfront or added to (financed into) the loan amount.

Principal and interest (P and I): Principal is the amount borrowed; interest is the cost of borrowing money.

Term: How long you take to pay the loan back (for example, 15 years).

What this calculator estimates

This tool does two connected jobs: (1) it estimates your maximum new home equity loan amount using a CLTV limit, and (2) it estimates the monthly payment and total cost for a fixed-rate home equity loan. A home equity loan is different from a HELOC (home equity line of credit): a home equity loan is usually a one-time lump sum with a fixed payment schedule, while a HELOC often works more like a credit card with a changing balance and possibly a variable rate.[3]

Equity and CLTV math

Estimated home equity = home value minus mortgage balance minus other lien balances. Current CLTV (percent) = 100 * (mortgage balance + other liens) / home value. Max total debt allowed by your CLTV limit = home value * (max CLTV percent / 100). Estimated max new loan amount = max(0, max total debt allowed - mortgage balance - other liens). If the result is 0, your balances already meet or exceed the CLTV limit, so there is no room (by this rule) for a new loan.

How closing costs change cash vs loan size

If you enter a requested cash amount, the calculator finds the loan amount needed to deliver that cash, based on how you pay closing costs: if closing costs are paid upfront, loan amount used = requested cash; if closing costs are financed, loan amount used = requested cash + closing costs. Cash received is shown as: if paid upfront, cash received = loan amount used; if financed, cash received = max(0, loan amount used - closing costs). This is a simplified way to separate loan size from money in your pocket; real lender handling can vary.

Feasibility check for requested cash

If requested cash is entered, the calculator compares the needed loan amount to your estimated max new loan amount. If it is too high, the calculator reports that your request does not fit the CLTV limit and also reports the maximum cash that would fit under the limit for both cases: (a) if costs are paid upfront, max cash = max new loan amount; (b) if costs are financed, max cash = max(0, max new loan amount - closing costs).

Monthly payment and totals (fixed-rate loan)

Monthly rate r = (annual note interest rate percent / 100) / 12 and number of payments n = term years * 12. Monthly payment (principal and interest) uses the standard amortizing loan formula used for mortgage-style payments.[1] If r = 0, monthly payment = loan amount used / n. Total of payments = monthly payment * n. Total interest = total of payments - loan amount used.

For example, a $50,000 loan at an 8.5% annual note interest rate over 15 years has a principal-and-interest payment of about $492.37 per month. Enter 8.5 in "Annual interest rate (%)" even if the lender discloses a higher APR because of fees; enter any closing costs separately.[4]

Input validation and safe handling

The calculator blocks invalid inputs that would break the math: home value must be greater than 0; max CLTV percent must be greater than 0 and at most 100; "Annual interest rate (%)" must be entered and must be 0 or higher; term must be greater than 0; balances and closing costs cannot be negative. It also guards against NaN or Infinity before showing results.