Home Equity Loan Calculator — what you can borrow & what it costs

How it works

Two pieces of arithmetic. The window: your equity is home value minus mortgage balance, and the borrowable amount is value × CLTV cap − balance — a lender lends against the home's value only up to a combined total across both loans. The cap is an assumption you set (80% by default) because lenders' caps differ; check your quote. The loan: the lump sum amortizes like any fixed-rate loan, M = P·r(1+r)ⁿ ⁄ ((1+r)ⁿ − 1), where P is the amount borrowed, r the monthly rate (the annual rate divided by 12), and n the number of payments — full principal and interest from the first month, which is exactly what separates it from a HELOC's draw-then-repay structure.

Worked example

LibreTexts works the amortization this loan uses: a $250,000 loan at 5.5% over 15 years costs $2,042.71 a month. The equity window around it is this page's arithmetic: on a $450,000 home still owing $250,000, your equity is $200,000, and an 80% CLTV cap makes $450,000 × 0.80 − $250,000 = $110,000 borrowable. Borrow $50,000 of that at 8.5% over 15 years and this calculator computes about $492 a month — the window and that payment are its own computation for these inputs; only the $2,042.71 amortization case is a published value (LibreTexts).

Frequently asked questions

What is a home equity loan?

A second mortgage that converts part of your equity into a fixed lump sum, secured by your home and repaid with equal amortizing payments from day one. Because the home secures it, falling behind can put the home at risk — the same caution CFPB attaches to every home-secured product.

How much can I borrow against my home?

Lenders cap the combined total of your mortgage and the new loan at a percentage of the home's value — the CLTV cap. Borrowable = value × cap − current balance: on a $450,000 home owing $250,000 with an 80% cap, that is $110,000. The cap varies by lender and product, which is why it is an adjustable assumption here.

How is this different from a HELOC?

A HELOC is a revolving line with a draw period — often interest-only — and a later repayment phase, so its payment jumps over time. A home equity loan is the fixed-rate, fixed-payment version: one lump sum, full principal-and-interest payments from the start, no payment shock. Use the HELOC calculator for the two-phase structure.

How is the monthly payment calculated?

With the standard amortization formula on the amount you actually borrow — not on your equity or the cap. Borrowing less than the borrowable window simply means a smaller loan; this calculator clamps the payment math to the window so an amount beyond it is priced at the maximum the cap allows.

What is CLTV and why does it matter?

Combined loan-to-value: all loans secured by the home, divided by its value. Lenders underwrite the new loan so the combined total stays under their cap — it is their cushion against price declines. Your current mortgage already uses part of the cap, so the more you owe, the less of the window remains.

Does my equity equal what I can borrow?

No. Equity is value minus balance; the borrowable amount is almost always less, because the CLTV cap holds the combined loans below the home's full value. At a 100% cap the two would match — real caps sit lower, and this calculator never lets the borrowable exceed the equity.

How accurate is this, and what does it exclude?

The window arithmetic and payment are exact for the inputs; the CLTV cap and rate are assumptions until your lender quotes them, and the home value is whatever you enter — an appraisal may differ. Excluded: closing costs and fees, your credit profile's effect on rate and cap, and tax treatment. Confirm against the lender's disclosure.