Home Equity Loan Calculator

This calculator has two parts. The top section computes your monthly payment, total interest, and the real cost of the loan once closing costs are factored in. The bottom section tells you how much equity you can actually tap.

1. Enter the loan amount — the lump sum you want to borrow against your home equity.
2. Set the interest rate — use a rate from a lender quote or the current average for home equity loans in your area.
3. Pick a term — shorter terms mean higher monthly payments but far less interest overall. A 10-year term costs roughly half the interest of a 20-year term on the same loan.
4. Add closing costs — enter a dollar amount or a percentage of the loan (2-5% is typical). Choose whether the lender deducts them from your proceeds or you pay them out of pocket at closing. The APR updates automatically so you can compare offers apples-to-apples.

Scroll down to the "How Much Can You Borrow?" section. Enter your home's current value and outstanding mortgage balance, pick the lender's LTV limit, and instantly see your maximum borrowable amount.

The interest rate isn't the whole picture. Closing costs — appraisal fees, origination fees, title search, recording fees — typically add 2% to 5% of the loan amount before you see a dime. That's $3,000 to $7,500 on a $150,000 loan.

APR (Annual Percentage Rate) bundles both the interest rate and these upfront costs into a single number. A loan offered at 7.5% with $5,000 in fees might actually be cheaper than one at 8% with zero fees — or it might not. The APR tells you for sure.

Watch for "no-closing-cost" offers. They sound appealing, but lenders typically recoup those costs through a higher interest rate. On a 15-year loan, that bump can add up to more than you saved. Use this calculator with both scenarios to see which truly costs less.

Both use your home as collateral, but they work very differently:

• Home equity loan — you get one lump sum, lock in a fixed rate, and repay in equal monthly installments. Best for a single large expense with a known price tag (kitchen remodel, debt consolidation, medical bill).
• HELOC — works like a credit card. You get a credit line you can draw from over a set period (usually 10 years), pay interest only on what you use, and the rate is usually variable. Best for ongoing costs you can't predict exactly (tuition payments, phased renovations).

If you value predictable payments and know exactly how much you need, a home equity loan is usually the simpler, safer choice. If flexibility matters more, explore a HELOC — but be prepared for payments that can fluctuate with interest rates.

Qualifying isn't just about how much equity you have. Lenders typically evaluate four things:

• Loan-to-value ratio (LTV) — your combined mortgage balance plus the new loan can't exceed 80-90% of your home's appraised value, depending on the lender.
• Credit score — most lenders require 630 or higher, though a score above 700 gets you better rates.
• Debt-to-income ratio (DTI) — total monthly debts (including the new payment) divided by gross monthly income. Lenders generally want this below 43%.
• Property condition — an appraisal confirms the home's value and ensures there are no major issues. Significant problems can reduce your appraised value and limit how much you can borrow.