Equity Loan Calculator
If you have built up equity in your home, an equity loan lets you convert that value into cash while keeping your existing mortgage in place. But how much can you actually borrow, and what will the monthly payments look like? Our equity loan calculator gives you instant estimates so you can decide whether tapping your home equity makes financial sense.
Use the calculator below–enter your home value, current mortgage balance, desired loan amount, interest rate, and term to see a full payment schedule.
How Can an Equity Loan Calculator Help You?
An equity loan calculator answers the two questions every homeowner asks: “How big a loan can I get?” and “What will my payments be?” By adjusting the inputs, you can test different scenarios–a shorter term, a higher rate, a smaller loan–and immediately see how each affects your monthly outlay and total interest.
The tool also reveals the true cost of borrowing, highlighting the total interest paid over the life of the loan. That makes it easier to compare offers from different lenders or to decide whether a home equity loan beats other financing options like personal loans or credit cards.
What Is a Home Equity Loan?
A home equity loan (sometimes called a second mortgage) is a lump-sum loan secured by the equity in your home. Equity is the difference between your home’s current market value and the amount you still owe on your mortgage.
- You receive the entire loan amount upfront.
- You repay it in fixed monthly installments over a set term, usually 5 to 30 years.
- The interest rate is typically fixed, so payments remain predictable.
Because the loan is secured by your property, rates are generally lower than those on unsecured debt. But if you default, the lender can foreclose.
Key Factors That Affect Your Equity Loan Payment
Several inputs drive the calculator’s results:
- Loan amount: The size of the lump sum you borrow. Lenders cap it based on your home’s loan-to-value (LTV) ratio; many allow up to 80–85% combined LTV (first mortgage + equity loan).
- Interest rate: Quoted as an annual percentage rate (APR). Rates vary with your credit score, loan term, and overall market conditions. A small rate difference can add thousands in interest over time.
- Loan term: Longer terms reduce the monthly payment but increase total interest paid. Shorter terms do the opposite.
- Remaining mortgage balance: This, along with your home’s appraised value, determines your available equity–and thus your maximum loan amount.
- Closing costs and fees: Some lenders fold these into the loan amount, raising your payments slightly.
How the Calculator Works
The equity loan calculator uses the standard amortization formula to compute the fixed monthly payment:
M = P × [r(1 + r)^n] / [(1 + r)^n – 1]
Where:
- M = monthly payment
- P = loan amount (principal)
- r = monthly interest rate (annual rate ÷ 12)
- n = total number of payments (term in years × 12)
From this, the calculator generates a full schedule showing how each payment is split between interest and principal, and how the remaining balance declines over time.
You don’t need to do the math; just adjust the sliders or enter your numbers to see the results instantly.
Equity Loan vs. HELOC: Which Fits Your Situation?
While a home equity loan provides a one-time lump sum, a home equity line of credit (HELOC) offers a revolving credit line that you can draw from as needed, usually over a 10-year draw period. Here’s a quick comparison:
| Feature | Home Equity Loan | HELOC |
|---|---|---|
| Disbursement | Lump sum at closing | Revolving line of credit |
| Interest rate | Fixed | Variable (often prime + margin) |
| Payment structure | Fixed monthly payments | Interest-only during draw, then amortizing |
| Best for | Large, one-time expenses | Ongoing or unpredictable costs |
| Risk | Predictable payments | Rate can rise, payments increase |
Both use your home as collateral. The calculator on this page is designed for a traditional equity loan, but you can approximate HELOC payments if you treat the estimated average balance as the loan amount.
Steps to Apply for an Equity Loan
- Check your credit score – Most lenders want at least a 620 FICO score; higher scores unlock better rates.
- Estimate your home equity – Get a rough idea of your home’s value (Zillow, local comps) and subtract your mortgage balance. Multiply by 0.80 to see a typical maximum loan amount.
- Run the numbers – Use the equity loan calculator to project monthly payments for different loan amounts and terms.
- Gather documentation – Pay stubs, tax returns, mortgage statements, and proof of homeowners insurance.
- Shop lenders – Compare rates and closing costs from banks, credit unions, and online lenders.
- Lock in your rate – Once approved, review the Loan Estimate form carefully before closing.
This calculator provides estimates only and does not constitute financial advice. Loan terms and rates depend on your creditworthiness and lender policies. Always consult a qualified professional before borrowing against your home.