Free Home Equity Loan Calculator
Your home equity is the part of your home you actually own: value minus mortgage balance. Lenders let you borrow against it two ways, a lump-sum loan with fixed payments or a HELOC line you draw from as needed. Enter your numbers to see your available equity, your max line, and what each option costs per month.
This free home equity calculator has two modes. For example, a $450,000 home with a $280,000 mortgage holds $170,000 in equity, and at a typical 80 percent combined loan-to-value cap you could borrow about $80,000. As a 15-year lump-sum loan at 8.5 percent that costs about $788 a month; as a $50,000 HELOC draw at 9 percent interest-only, about $375 a month. HELOC rates are usually variable, so that payment can move.
Estimates only. Actual borrowing limits, rates, and terms depend on credit, income, appraisal, and lender rules. HELOC rates are typically variable. Not financial advice; your home secures this debt.
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How home equity borrowing math works
Equity equals home value minus mortgage balance. Lenders rarely let you borrow all of it: most cap total borrowing at 80 percent of the home value, a rule called the combined loan-to-value (CLTV) limit. Max line = (home value x 0.80) - mortgage balance. Some lenders allow 85 or 90 percent CLTV, but higher limits mean higher rates.
A lump-sum home equity loan works like a second mortgage: you receive the full amount at closing and repay it in fixed monthly installments over a set term. The payment formula is the standard amortization formula, so a longer term lowers the payment but raises total interest. Rates are usually fixed, which makes budgeting simple.
A HELOC works like a credit card secured by your home: a credit line you draw from during a draw period, often 10 years, then repay over a repayment period, often 20 years. During the draw period many HELOCs charge interest only on what you drew, so the payment is draw amount x monthly rate. The catch is the rate is usually variable, tied to the prime rate, so payments rise when rates rise.
Home equity questions
How much equity do I have in my home?
Equity = current market value - mortgage balance (plus any other liens). Use a realistic value: recent comparable sales or an appraisal, not a wishful number. Note that having equity and being able to borrow against it are different things; lenders apply the CLTV cap, income checks, and credit requirements before approving a line.
How much of my home equity can I borrow?
The 80 percent combined loan-to-value cap is the industry standard for the best rates. On a $450,000 home with a $280,000 mortgage, that allows about $80,000 in new borrowing. Some lenders go to 85 or 90 percent CLTV with stricter credit requirements and higher rates. Government programs for eligible borrowers can go higher still.
Is a home equity loan or HELOC better?
A lump-sum loan wins when you know the amount and want payment certainty: a $60,000 roof replacement at a fixed rate. A HELOC wins for phased spending like a multi-year renovation, because you pay interest only on what you have drawn. HELOCs usually have variable rates and annual fees, while lump-sum loans usually have fixed rates and closing costs.
Do I need an appraisal for a home equity loan?
Most lenders order an appraisal or run an automated valuation model to confirm the home's worth. Full appraisals cost a few hundred dollars and some lenders cover or waive them as a promotion. If the value comes in low, your approved line shrinks, which is the most common surprise in the process.