Home Equity Loan Calculator

A home equity loan (sometimes called a HEL) is a second mortgage that lets you borrow a specific amount against the equity in your home. You receive the money as one lump-sum payment and repay it in fixed monthly installments over a set term, usually 5 to 30 years. According to the Consumer Financial Protection Bureau (CFPB), it usually has a fixed interest rate, and if you already have a first mortgage it sits in second position behind it. This tool covers lump-sum, fixed-rate, fully amortized home equity loans only — not revolving HELOCs.

Maximum loan = home value × max CLTV − current mortgage balance, floored at $0. Example: a $500,000 home with a $300,000 mortgage balance at an 80% CLTV cap gives 0.80 × $500,000 − $300,000 = $100,000 of maximum borrowing.

With the standard fixed-rate amortization formula: payment = P × r(1+r)^n / ((1+r)^n − 1), where r is the annual rate divided by 12 and n is the term in months. Example: $100,000 at 7.5% for 15 years (180 months) → $927.01 per month, every month, until the balance is zero.

Total interest = monthly payment × number of payments − loan amount. On the $100,000 at 7.5% for 15 years example: $927.01 × 180 − $100,000 = $66,858.22 of total interest, for $166,862.22 total paid over the life of the loan.

A home equity loan is a lump-sum installment loan with (usually) a fixed rate and fixed monthly payments from day one — fully amortized over a set term. A HELOC is a revolving line of credit: you draw, repay, and re-draw during a draw period, usually with a variable rate and interest-only payments. Choose a home equity loan when you need the full amount at once with predictable payments. For revolving, variable-rate draw-and-repayment scenarios, use our HELOC calculator instead.

Most lenders cap combined loan-to-value (first mortgage + home equity loan) at 80%, meaning you must keep at least 20% equity in the home. Some lenders allow 85% or 90% for strong credit profiles. A higher cap raises the maximum loan: a $500,000 home with a $300,000 mortgage allows $100,000 at 80% CLTV but $150,000 at 90% CLTV.

Closing costs reduce the cash you actually receive. At 2% on a $100,000 loan, costs are $2,000 and net proceeds are $98,000. This calculator shows net proceeds after closing costs so you can compare against the amount you actually need.

If your mortgage balance is at or above home value × the CLTV cap, the maximum loan is $0 — there is nothing left to borrow against. Example: a $500,000 home with a $420,000 mortgage balance at an 80% CLTV cap → maximum home equity loan $0.

Because it sits in second position: if the home were sold or foreclosed, the first mortgage is paid before the home equity loan, so the lender takes more risk and charges a higher rate. This matches what the CFPB describes — both products are second mortgages paid in addition to the first mortgage.

Yes. The CFPB notes a home equity loan is a second mortgage — your original mortgage stays in place, and the home equity loan adds a separate second monthly payment with its own interest rate and term.

Example with $100,000 borrowed: a home equity loan at 7.5% for 15 years costs $927.01 per month — $177.01 more than a HELOC interest-only payment of $750.00 per month on a $100,000 draw at 9%. The trade-off: the home equity loan payment includes principal, so the balance amortizes to zero; the interest-only HELOC payment never reduces the balance.

It can be, but only under specific conditions: under current IRS rules, home equity loan interest is generally deductible only when the loan is used to buy, build, or substantially improve the home securing the loan — not for other spending such as vacations or everyday bills. Tax rules change, so confirm your situation with a qualified tax professional. This calculator gives estimates only, not tax or financial advice.