Calculate payments, equity, and costs for home equity loans and HELOCs
A home equity loan calculator helps homeowners understand how much they can borrow against their home, what their monthly payments will be, and the total cost of the loan over time. Whether you are considering a traditional Home Equity Loan (HEL) or a Home Equity Line of Credit (HELOC), this calculator gives you the complete financial picture before you apply. Home equity is the portion of your home's value that you actually own — the difference between your home's current market value and the outstanding balance on your mortgage. For example, if your home is worth $400,000 and you owe $200,000 on your mortgage, your available equity is $200,000. However, lenders typically do not allow you to borrow 100% of your equity. Most lenders cap borrowing at 80–85% of your home's combined loan-to-value (CLTV) ratio, which means the total of your existing mortgage plus the new loan cannot exceed 80–85% of your home's value. A Home Equity Loan is a one-time lump-sum loan with a fixed interest rate and fixed monthly payments spread over a defined term — typically 5 to 30 years. Because the rate and payment never change, it is well-suited for large, one-time expenses like a home renovation, debt consolidation, or college tuition. A HELOC, on the other hand, works more like a credit card — it is a revolving line of credit with a variable interest rate. During the draw period (typically 5 to 10 years), you can borrow, repay, and re-borrow up to your credit limit. You usually pay interest only during the draw period. Once the draw period ends, the repayment period begins (typically 10 to 20 years), during which you pay both principal and interest to pay off the outstanding balance. Understanding the difference between LTV and CLTV is critical when evaluating your borrowing options. Your current LTV (Loan-to-Value) is simply your mortgage balance divided by your home value, expressed as a percentage. Your CLTV (Combined Loan-to-Value) adds your new loan amount to your existing mortgage balance before dividing by your home value. Most lenders require your CLTV to stay at or below 85% — meaning you must retain at least 15% equity in your home after taking out the new loan. This calculator computes all key figures automatically: your maximum borrowable amount based on your chosen LTV cap, monthly payments (both during the draw period and repayment period for HELOCs), total interest cost, total payments, APR including closing costs, and a full amortization schedule. It also estimates potential tax savings based on your marginal tax rate and the IRS rules for deducting home equity interest — interest is only deductible if proceeds are used to buy, build, or substantially improve your home, and combined mortgage debt must not exceed $750,000 under current TCJA rules (through tax year 2025). Using our Home Equity Loan Calculator before applying can help you compare loan amounts and terms, understand payment shock risk when transitioning from HELOC draw to repayment, evaluate the real cost of closing fees, and see how extra monthly payments can reduce total interest on a Home Equity Loan. The calculator supports both annual and monthly amortization views, visual charts showing loan balance and equity growth over time, and CSV export for your records.
Understanding Home Equity Loans and HELOCs
What Is a Home Equity Loan?
A Home Equity Loan (HEL) is a second mortgage that lets you borrow a fixed lump sum using your home as collateral. You receive all the money upfront and repay it in equal monthly installments over a fixed term, typically 5 to 30 years. The interest rate is fixed, so your payment never changes. This predictability makes HELs ideal for large one-time expenses. A HELOC (Home Equity Line of Credit) is also secured by your home but works differently — it is a revolving credit line, similar to a credit card, with a variable interest rate tied to the prime rate. During the draw period you borrow as needed, make interest-only minimum payments, and can repay and re-borrow. After the draw period, the line closes and you repay the outstanding balance over the repayment period with full principal and interest payments.
How Are Payments Calculated?
For a Home Equity Loan, the monthly payment is calculated using standard loan amortization: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). For a HELOC during the interest-only draw period: Monthly Payment = Balance × (Annual Rate ÷ 12). When the HELOC enters repayment, the outstanding balance is re-amortized over the remaining repayment period using the same formula. The APR calculation incorporates closing costs — it solves for the effective monthly rate where the net proceeds (loan amount minus closing costs) equal the present value of all scheduled payments. Maximum borrowable amount = (Home Value × Max LTV%) − Existing Mortgage Balance. CLTV = (Existing Mortgage + New Loan) ÷ Home Value × 100.
Why Home Equity Borrowing Matters
Home equity loans and HELOCs are among the lowest-cost borrowing options available to homeowners because the loan is secured by real property. Interest rates are significantly lower than personal loans or credit cards — often 3 to 6 percentage points lower. This makes home equity borrowing attractive for debt consolidation, major home improvements, or large planned expenses. However, the stakes are higher: if you default, you could lose your home. That is why understanding your CLTV, payment obligations, and total cost is essential before proceeding. For homeowners who use funds to improve their primary residence, the interest may also be tax-deductible, providing additional financial benefit. Comparing the true APR (including closing costs and fees) against alternatives is the key step most borrowers skip — this calculator makes that comparison easy.
Important Limitations and Caveats
This calculator provides estimates for educational purposes only. Actual loan approval, interest rates, and terms depend on your credit score (minimum 620–680 for most lenders, 720+ for best rates), debt-to-income ratio (maximum 43–45%), property type, lender policies, and local market conditions. HELOC rates are variable and indexed to the prime rate plus a margin — the rate shown in this calculator is a starting estimate and can increase over time, which will change your payments. The tax savings estimate assumes you itemize deductions (not take the standard deduction), that loan proceeds are used for eligible home improvements, and that your combined mortgage debt is within the $750,000 TCJA limit. These tax rules are scheduled to revert in 2026 if the TCJA expires — consult a tax professional for personalized advice. Closing costs vary significantly by lender and region. Always obtain multiple loan quotes before choosing a lender.
この計算機の使い方
Choose Your Loan Type
Select 'Home Equity Loan' for a lump-sum fixed-rate loan with predictable monthly payments, or 'HELOC' for a flexible revolving credit line. Use HEL for one-time large expenses and HELOC for ongoing or uncertain costs.
Enter Your Property and Mortgage Details
Input your home's current market value and your outstanding mortgage balance. The calculator will instantly show your available equity, current LTV, and the maximum you can borrow based on your selected LTV cap (typically 85%).
Set Your Loan Parameters
For a HEL, enter the loan amount, interest rate, and term (5–30 years). For a HELOC, set the draw period (5–10 years), repayment period (10–20 years), and choose between interest-only or full P&I payments during the draw phase.
Review Costs, Charts, and Tax Savings
Examine the payment breakdown donut chart, the balance-over-time line graph, and the tax savings estimate. Use the amortization schedule to see the year-by-year payoff. Export to CSV or print for your records before meeting with a lender.
よくある質問
What is the difference between a Home Equity Loan and a HELOC?
A Home Equity Loan (HEL) provides a lump sum upfront with a fixed interest rate and fixed monthly payments for the entire term — typically 5 to 30 years. Your payment never changes. A HELOC is a revolving line of credit with a variable interest rate. During the draw period (usually 5–10 years), you can borrow, repay, and re-borrow as needed, paying only interest on what you use. After the draw period, the line closes and you repay the remaining balance with principal and interest over the repayment period (typically 10–20 years). HELs offer predictability; HELOCs offer flexibility.
How much can I borrow with a home equity loan or HELOC?
Your maximum borrowable amount depends on your CLTV (Combined Loan-to-Value) ratio. Most lenders allow a maximum CLTV of 80–90%, with 85% being the most common limit. The formula is: Max Loan = (Home Value × Max LTV%) − Existing Mortgage Balance. For example, with a $400,000 home, $200,000 mortgage, and an 85% LTV cap: Max Loan = ($400,000 × 0.85) − $200,000 = $140,000. Your credit score (minimum 620–680), debt-to-income ratio (maximum 43%), and property type also affect approval and how much you can borrow.
Is home equity loan interest tax deductible?
Under current TCJA rules (effective through tax year 2025), home equity loan and HELOC interest is tax deductible only if the loan proceeds are used to buy, build, or substantially improve your primary or secondary residence. You must also itemize deductions rather than taking the standard deduction, and your total mortgage debt (including the HEL/HELOC) must not exceed $750,000. If the TCJA expires after 2025 as currently scheduled, pre-2018 rules would be restored — allowing deductibility regardless of use, with a $1 million debt limit. Always consult a tax professional for personalized guidance.
What is CLTV and why does it matter?
CLTV stands for Combined Loan-to-Value ratio. It is calculated as: (Existing Mortgage Balance + New Loan Amount) ÷ Home Value × 100. While your current LTV only accounts for your first mortgage, CLTV includes all liens on the property. Lenders use CLTV to assess risk — the higher the CLTV, the less equity you have as a cushion. Most lenders cap CLTV at 80–90% for home equity products. A CLTV above 85% may result in a higher interest rate, stricter qualification requirements, or denial. Maintaining at least 15–20% equity (CLTV of 80–85% or lower) is recommended.
What is payment shock with a HELOC?
Payment shock refers to the significant increase in required monthly payments when a HELOC transitions from the draw period to the repayment period. During the draw period, you typically pay only interest on the outstanding balance — for example, $333/month on a $50,000 balance at 8% APR. Once the draw period ends, the full balance is amortized over the repayment period. If the repayment period is 20 years, your payment could jump to over $400/month. The shorter the repayment period, the more severe the shock. Our calculator flags this with a warning when the repayment payment exceeds 1.5x the draw payment.
Should I choose a longer or shorter loan term?
A shorter term (5–10 years) means higher monthly payments but significantly less total interest paid — you build equity faster and pay off the debt sooner. A longer term (15–30 years) results in lower monthly payments, making the loan more affordable on a month-to-month basis, but you will pay substantially more interest over the life of the loan. For example, a $50,000 home equity loan at 8.5% APR has a monthly payment of $623 over 10 years (total interest: $24,800) versus $432/month over 20 years (total interest: $53,700). Use the amortization schedule in this calculator to compare terms side by side before deciding.