Home Equity Loan Calculator
You can usually borrow up to 80–85% of your home's value minus what you still owe. Multiply value by the CLTV cap, subtract your mortgage, and that's your maximum home equity loan. This calculator shows that amount plus the fixed monthly payment and total interest.
Use this home equity loan calculator to see how much you can borrow against your home and what it costs. Enter your home value, current mortgage balance, the lender's combined loan-to-value cap, and the rate and term — it returns your available equity, the maximum loan, your new CLTV and the monthly payment with total interest.
Enter your home value, mortgage balance, CLTV cap, rate and term, then press Calculate.
How the home equity loan calculator works
A home equity loan lets you turn part of the value you have built up into a lump sum, using your home as collateral. The size is limited by how much equity a lender will let you tap. This calculator applies the standard rule: total mortgage debt can reach a combined loan-to-value (CLTV) cap — commonly 80% to 85% of the value — so it multiplies your value by that cap, subtracts your existing mortgage, and shows the maximum home equity loan available. It then amortizes that amount at your rate and term to give the fixed monthly payment and the total interest you would pay.
Seeing both figures together keeps the decision grounded. The maximum you can borrow is rarely the amount you should — a bigger loan means a bigger payment secured by your house. If your goal is to clear costly balances, compare the payment here with your current debts on the debt consolidation calculator, and check where a cash-out refinance might do the same job through your first mortgage instead.
The home equity formula
- Equity — home value − mortgage balance
- CLTV cap — usually 80%–85% by lender
- New CLTV — (mortgage + new loan) ÷ value
How much equity can you actually use?
Equity and borrowing power are not the same thing. You might have $200,000 of equity in the worked example, but the lender's 85% CLTV cap means only $125,000 of it is borrowable — the rest is the cushion they require. Raising the cap toward 85% or beyond increases the loan, but also the risk to you: the more of your home's value is borrowed against, the less protection you have if prices fall. Lenders that allow higher CLTVs usually charge more for the privilege. The calculator lets you set the cap so you can see exactly how it changes the number.
Home equity loan or something else?
A fixed home equity loan is ideal for a known, one-time cost — a renovation with a firm quote, or paying off a fixed debt — because the rate and payment never change. If you need flexible access over time, a HELOC's revolving line may fit better, though its rate is variable. And if you could improve your first-mortgage rate at the same time, a cash-out refinance might beat a second loan. The right tool depends on how much you need, when you need it, and whether you value payment certainty over flexibility.
Home equity loan, HELOC and second mortgages
These names overlap, which causes a lot of confusion. Both a home equity loan and a HELOC are second mortgages — each is a new lien that sits behind your existing first mortgage. The difference is how you receive and repay the money. A home equity loan hands you a fixed lump sum at a fixed rate, repaid in level monthly payments, which is what this calculator models. A HELOC is a revolving line of credit with a variable rate: you draw what you need during a draw period, often paying interest only at first, then repay the balance later. Fixed loans suit a known one-time cost; a HELOC suits ongoing or uncertain needs. Some borrowers even use the equity to buy another property or a second home, with the cash serving as a down payment — but remember the debt is secured against the home you live in, so the stakes are higher than an unsecured loan.
Estimate only — not a loan offer or financial advice. CLTV caps, rates and terms vary by lender and credit profile. Your home secures the loan; borrow responsibly. Confirm figures with a lender.
How to use it & key terms
Enter your home value, mortgage balance, the lender's CLTV cap, and the loan rate and term, then press Calculate to see your equity, the maximum loan, your new CLTV and the monthly payment.
| Term | What it means |
|---|---|
| Home equity loan | A fixed-rate lump sum secured by your home, like a second mortgage. |
| Equity | Home value minus what you owe on it. |
| CLTV | Combined loan-to-value — all home loans divided by value. |
| CLTV cap | The maximum CLTV a lender allows, often 80%–85%. |
| Max loan | The largest home equity loan that keeps you under the cap. |
| Term | Years to repay the home equity loan. |
Sources & methodology
The calculator computes your equity as home value minus mortgage balance, then the maximum borrowable as the value times the CLTV cap minus the existing mortgage, floored at zero when you are already at or above the cap. The monthly payment on that loan (or a smaller amount you choose) uses the standard fixed-rate amortization formula over the entered term, and total interest is the sum of payments minus the principal. The new CLTV is the existing mortgage plus the new loan divided by the value. CLTV caps of 80%–85% reflect common lender limits and can be adjusted to match your lender.
Sources: Standard combined loan-to-value lending limits for home equity loans (commonly 80%–85%) and the standard amortization formula. Rates and caps vary by lender.
The real risk of putting your home up as collateral
A home equity loan is appealing because it is cheap compared with unsecured borrowing, but the reason it is cheap is the same reason it deserves respect: the loan is secured by your house. If you cannot keep up the payments, the lender's remedy is the home itself. Turning flexible, unsecured debt — a credit card balance, say — into debt backed by your property lowers the rate, but it raises the stakes from a damaged credit score to the roof over your head.
The second risk is the direction of the housing market. Because a home equity loan sits on top of your first mortgage, the two together consume your equity. If values fall, a household that borrowed close to the limit can find the combined loans approaching or exceeding the home's worth, which makes selling or refinancing difficult and leaves less protection if life goes wrong. Borrowing a smaller share of your equity keeps a buffer between what you owe and what the home is worth.
A quieter risk is what the money is used for. Equity built up over years of payments is real wealth, and spending it on things that do not last — a holiday, everyday bills, or debt that simply reappears — trades long-term security for short-term relief. Using it to add lasting value, such as a renovation that improves the home, or to replace far more expensive debt at a genuinely lower cost, is a stronger case. The question is not only whether you can borrow, but whether the reason justifies the collateral.
Finally, watch the term. Stretching a modest balance over a long repayment period lowers the monthly payment but can raise the total interest and keep your home pledged for years. Borrow only what the purpose truly needs, keep the term as short as the budget allows, and leave headroom in your equity rather than drawing it to the maximum. To see how a new loan changes the share of your home you have borrowed against, check our LTV calculator before you commit.
Frequently asked questions
How much can I borrow with a home equity loan?
Most lenders let your total mortgage debt reach 80% to 85% of the home's value. Multiply the value by that combined loan-to-value limit, subtract your current mortgage balance, and the result is roughly the most you can borrow. On a $500,000 home with a $300,000 mortgage at 85% CLTV, that is about $125,000.
What is CLTV?
CLTV, or combined loan-to-value, is all the loans secured by your home added together and divided by the home's value. Lenders cap it, commonly at 80% to 85%, to keep a cushion of equity. Your home equity loan can only be large enough to keep total debt under that cap.
What is the difference between a home equity loan and a HELOC?
A home equity loan gives you a lump sum at a fixed rate with fixed payments — like a second mortgage. A HELOC is a revolving line of credit with a variable rate that you draw from as needed. This calculator models a fixed home equity loan; a HELOC payment would change as you borrow and as rates move.
Are home equity loan rates higher than my mortgage?
Usually yes. A home equity loan sits behind your first mortgage, so the lender takes more risk and charges a somewhat higher rate. Terms are also shorter, often 5 to 20 years. Enter the rate you are quoted to see the exact payment; rates vary widely by lender and credit.
How is the home equity loan payment calculated?
It uses the standard amortization formula: the loan amount, the fixed rate and the term produce a level monthly payment that pays off the balance by the end. A larger loan, higher rate or shorter term all raise the payment. The calculator also totals the interest over the life of the loan.
What can I use a home equity loan for?
Common uses are home improvements, consolidating higher-interest debt, or large one-time expenses. Because the loan is secured by your home, the rate is lower than unsecured borrowing — but your home is collateral, so missing payments risks foreclosure. Borrow only what you can comfortably repay.
Is a HELOC a second mortgage?
Yes. Both a HELOC and a home equity loan are second mortgages — each is a lien on your home that sits behind your first mortgage. The difference is the form: a home equity loan is a fixed lump sum with fixed payments, while a HELOC is a revolving, variable-rate line of credit you draw from as needed. If you default, the first mortgage is repaid before the second.
What credit score do I need for a home equity loan?
Most lenders look for a score of about 620 or higher, with the best rates going to borrowers above 680. Some lenders will work with scores in the 580 to 620 range, usually in exchange for a lower CLTV cap and a higher rate. Along with your score, lenders weigh your equity, income and total debt, so a strong file elsewhere can offset a lower score.
Can I use a home equity loan to buy another house?
Yes. A home equity loan or HELOC can turn your equity into cash for a second home, a rental property or an investment, often used as the down payment. The trade-off is real: the new debt is secured against the home you live in, so if the second purchase runs into trouble, your primary residence is still on the line. Make sure the numbers work first.
Are home equity loans and HELOCs a good idea?
They can be, for the right purpose. Because they are secured by your home, they carry lower rates than credit cards or personal loans, which makes them powerful for home improvements or consolidating high-interest debt. The downside is that your home is the collateral — miss payments and you risk foreclosure — and it is easy to borrow more than you need. Used for a clear, affordable purpose they are a good tool.
How do I get equity out of my home without refinancing?
A home equity loan or a HELOC lets you borrow against your equity while leaving your first mortgage untouched — you keep your existing rate and avoid a full refinance. Both are second mortgages: a home equity loan is a fixed lump sum, a HELOC a revolving line you draw from. This is the usual way to tap equity without a cash-out refinance, which would replace your whole first mortgage with a larger one.