Calculation & Conversion / Calculators
Home Equity Loan Calculator
This calculator starts from your home's value and what you still owe on it, subtracts one from the other to get your equity, and then applies a combined loan-to-value cap - 80% at a 680 score, 85% at 700, 90% at 740 or above - to work out the largest loan a lender would typically approve. It then prices that amount two ways. A home equity loan is one lump sum at a fixed rate with a level payment for the whole term. A HELOC is a revolving line: you pay interest only on what you have drawn through the draw period, usually ten years, and the balance then amortizes over the repayment period, typically twenty. Because HELOC rates are quoted as prime plus a margin, it also shows what the draw-period payment becomes if rates rise by one, two or three percentage points. Alongside both, it prices the identical amount over an identical horizon at the average personal loan and credit card rates the Federal Reserve publishes, so the secured and unsecured options are on the same line. Every figure is computed month by month in whole cents, so total payments equal the principal plus total interest exactly.
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One lump sum at closing, one fixed rate, one level payment. Use it when you know the full cost up front and want the payment never to move.
Your home
What you think it would sell for. The lender will order its own appraisal.
Enter 0 if the mortgage is paid off.
Still qualifies for 90% CLTV at most lenders. Typical CLTV cap at this tier: 90%.
The loan
Leave it at the cap if you want the maximum.
Fixed for the whole term. Typical for this tier: 7.68%.
Level payments for the whole term.
You could borrow up to
$117,500
$425,000 × 90% − $265,000 = $117,500 · that is 73.4% of your $160,000 in equity.
Equity
$160,000
37.6% of value
CLTV cap
90%
Current LTV 62.4%
Monthly payment
$717.86
for 10 years
Total interest
$26,143
over 10 years
Same $60,000, three other ways to borrow it
Identical amount and identical 10 years horizon, so only the rate and the structure change. Reference rates are Fed G.19 Q1 2026 averages, not offers.
| Product | Rate | Monthly | Total interest | Secured by |
|---|---|---|---|---|
| Home equity loan (fixed)Least interest overall | 7.68% | $717.86 | $26,143 | Your home |
| HELOC (variable) +$4,632 vs the cheapest | 7.35% | $367.50 | $30,776 | Your home |
| Personal loan (unsecured) +$15,704 vs the cheapest | 11.65% | $848.73 | $41,848 | Nothing |
| Credit card (revolving) +$60,283 vs the cheapest | 21.51% | $1,220.23 | $86,426 | Nothing |
Putting this on a credit card instead would cost $60,283 more in interest — and the card can still raise your rate. The trade-off is that a credit card cannot take your home.
The other option: HELOC (variable)
Same $60,000 over the same 10 years, priced 7.35%.
Draw payment
$367.50
then $950.95 in repayment
Total interest
$30,776
+$4,632 vs your pick
Rate behaviour
Variable
payment jumps 159% at conversion
Balance over time
Level payments: early months are mostly interest, later months mostly principal.
Before you sign
Your home is the collateral
Both products are secured by your house. If you stop paying, the lender can foreclose — the second lien gets paid only after the first mortgage, which is why second-lien rates sit above first-mortgage rates. An unsecured personal loan or credit card cannot take your home.
Interest accrues on the whole lump sum from day one
A home equity loan disburses the entire amount at closing and charges interest on all of it immediately. If the money will actually go out over months — a renovation billed as work completes, tuition billed per term — a HELOC only charges interest on what you have drawn, which usually wins even at a slightly higher rate. The fixed loan is the better fit when you know the full cost up front and want a payment that never moves.
The interest usually is not deductible
Under IRC §163(h)(3), home equity interest is deductible only when the proceeds buy, build, or substantially improve the home that secures the loan — and only if you itemize. The Tax Cuts and Jobs Act suspended the deduction for other uses; the One Big Beautiful Bill Act (signed July 4, 2025) made that suspension permanent. Qualifying debt is capped at the first $750,000 of combined acquisition debt ($375,000 if married filing separately), and the 2026 standard deduction is $32,200 joint / $16,100 single, so most filers get no benefit. This is general information, not tax advice.
The CLTV cap here is a typical grid, not an offer
This calculator uses a 90% combined loan-to-value cap for the 740–779 band, drawn from published lender grids (680 → 80%, 700 → 85%, 740+ → 90%). Caps are set by each lender, not by a federal rule — Fannie Mae does not buy standalone closed-end seconds, and Freddie Mac only began a limited pilot in December 2024. Your actual cap also depends on occupancy, debt-to-income (43% is the common ceiling), and the appraisal.
The lender’s appraisal sets the value, not your estimate
Equity is measured against the appraised value at underwriting. If the appraisal lands below your estimate, the available line shrinks by the same amount. Appraisals typically cost a few hundred dollars, and some lenders substitute an automated valuation model on smaller amounts.
Fees vary and are not in these numbers
Lenders may charge origination, appraisal, annual, inactivity, or early-closure fees, and some require you to reimburse closing costs if you close the line within the first two or three years. The monthly payments above are principal and interest only — they exclude any of that, and they exclude the homeowners insurance and property taxes you already pay.
How this is calculated
CLTV caps come from published lender grids (680 → 80%, 700 → 85%, 740+ → 90%); caps are set by each lender, not by a federal rule. National averages: HELOC 7.09% and fixed home equity loan 7.42% (Curinos, September 14, 2026, 780+ score and CLTV under 70%), with advertised HELOCs ranging 3.99%–11.60%. Everything runs in your browser; nothing is uploaded.
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How to use
- 1
Enter your home's value and what you still owe
Type your estimated market value and the remaining balance on your first mortgage. The difference is your equity. The lender will order its own appraisal, so treat your number as an estimate.
- 2
Pick your credit score range
The band sets the combined loan-to-value cap used for the borrowing limit and the margin used for the suggested rate. Caps come from published lender grids: about 80% at 680, 85% at 700, 90% at 740 or above.
- 3
Choose the product and how much you need
Pick a fixed home equity loan for one known cost, or a HELOC if you will draw over time. Enter the amount you want to borrow - leave it at the cap if you want the maximum.
- 4
Set the rate and the term
The suggested rate starts at prime plus a margin for your tier. Adjust it to whatever a lender actually quoted you. For a HELOC, set the draw period and the repayment period separately.
- 5
Compare it against the unsecured options
Read the comparison table for the same amount over the same horizon at average personal loan and credit card rates, then read the notes about the payment jump, the variable rate and the tax treatment before you commit.
Key facts
- FormulaEquity is the home's value minus the mortgage balance. The maximum loan is the value times the combined loan-to-value cap minus the mortgage balance, floored at zero. A fixed home equity loan uses the level payment P x i / (1 - (1+i)^-n) with i as the annual rate divided by 12 and the final payment adjusted to clear the last few cents. A HELOC pays interest only on the drawn balance through the draw period, leaving the balance unchanged, then amortizes that balance over the repayment period. In both cases total payments equal the principal plus total interest exactly, because every step is computed in whole cents.Source:This page's model; standard amortizing loan formula with the final payment adjusted the way servicers do it
- How much you can actually borrowLenders cap the combined loan-to-value ratio, counting the first mortgage and the new loan together. Most banks and credit unions allow 80% to 85% on a primary residence, with non-QM programs reaching 90% for strong borrowers. Published grids tie the cap to credit score: around 80% at 680, 85% at 700 and 90% at 740 or above. Second homes typically run 75% to 85%, and investment properties 60% to 75%. These caps are set by each lender rather than by a federal rule - Fannie Mae does not buy standalone closed-end seconds, and Freddie Mac only began a limited pilot in December 2024. Minimum loan sizes are usually around $10,000.Source:Published 2026 lender guidelines including Rocket Mortgage's tiered grid; The Mortgage Reports; Freddie Mac closed-end second pilot, December 2024
- Where rates stood in September 2026Curinos put the average HELOC at 7.09% on September 14, 2026 - a 2026 low - and the average fixed-rate home equity loan at 7.42%, up from its 7.31% low in late June. Both figures assume a 780+ credit score and a combined loan-to-value ratio under 70%. Bankrate's separate survey showed advertised HELOCs ranging from 3.99% to 11.60%. The prime rate that HELOCs are priced from has held at 6.75% since December 2025, and the Federal Reserve held the federal funds target at 3.50% to 3.75% for the fifth consecutive meeting on July 28-29, 2026, with three officials dissenting in favour of a hike. Commercial banks held $287.4 billion of HELOCs as of July 2026, the highest level of the year.Source:Curinos, September 14, 2026; Bankrate national HELOC survey, September 9, 2026; Federal Reserve H.15 and Board of Governors consumer credit data, July 2026; FOMC statement, July 29, 2026
- The interest is usually not deductibleUnder IRC section 163(h)(3), interest on home equity debt is deductible only when the proceeds buy, build or substantially improve the home that secures the loan, and only for taxpayers who itemize. The Tax Cuts and Jobs Act suspended the deduction for other uses through 2025; the One Big Beautiful Bill Act, signed July 4, 2025, made that suspension permanent instead of letting it expire. Qualifying debt is capped at the first $750,000 of combined acquisition debt, or $375,000 if married filing separately, with loans taken on or before December 15, 2017 keeping a $1 million grandfathered cap. The 2026 standard deduction is $32,200 married filing jointly, $16,100 single and $24,150 for head of household, so most filers get no benefit either way.Source:IRC section 163(h)(3); Tax Cuts and Jobs Act of 2017; One Big Beautiful Bill Act, Public Law 119-21 (July 4, 2025); IRS Publication 936; Rev. Proc. 2025-32
- Cost of the keywordReal estate sits at the lower end of personal finance advertising, with property-related pages typically earning $8 to $20 per thousand pageviews - below the $15 to $50 that banking, credit and investing terms command, though home equity queries convert well for lenders and the intent is unusually commercial.Source:Published real estate vertical RPM ranges, 2025
How this calculator works
Equity is the home's value minus what is still owed on it. The maximum loan is the value multiplied by the combined loan-to-value cap matching your credit band, minus the existing mortgage balance, floored at zero. That amount is then priced both ways: as a fixed-rate home equity loan with a level payment across the whole term, and as a line of credit with an interest-only draw period followed by an amortising repayment period. The final payment is adjusted the way servicers adjust it, rather than left with a rounding remainder.
The caps used are the tiers lenders commonly publish rather than a single statutory maximum, so a given borrower may qualify for more or less than the model shows. Closing costs, appraisal fees and the possibility that a lender reduces a line after closing are not modelled, and the home is treated as having one value rather than a range — which matters most precisely when a valuation is contested.
Sources and standards
Disclaimer
This is an educational calculator, not financial advice. The result is an arithmetic projection of the figures you enter: it does not know your full circumstances, the terms of a specific offer, or the tax and regulatory rules that apply where you live. Confirm any figure against the terms of the product itself, or with a licensed professional, before acting on it.
Last reviewed:
Frequently asked questions
What is the difference between a HELOC and a home equity loan?
Both are second liens secured by the same house, and the difference is in the structure rather than the collateral. A home equity loan hands you the entire amount at closing, charges a fixed rate, and collects one level payment for the whole term - you are paying interest on all of the money from day one, whether or not you have spent it yet. A HELOC works like a credit card secured by your home: you are approved for a limit, you draw only what you need, and during the draw period - usually ten years - the minimum payment is interest only on the balance you have actually used. That makes a HELOC the better fit for a cost that arrives in stages, such as a renovation billed as work completes, because you are not paying interest on money still sitting in the line. The trade-off is that the balance does not shrink while you are only paying interest, and when the draw window closes the payment is recalculated to amortize whatever you owe over the repayment period - typically a jump of about 30%. A HELOC also usually carries a variable rate, while a home equity loan does not.
Are home equity rates fixed or variable?
It depends on the product, and this is where the two diverge most. Home equity loans are almost always fixed: the rate you are quoted at closing is the rate for the life of the loan, and your payment never changes. HELOCs are almost always variable, quoted as the prime rate plus a margin set by the lender from your credit score, loan-to-value ratio and debt-to-income ratio. Prime has held at 6.75% since December 2025, so the movement in quoted HELOC rates over 2026 has come from lenders widening their margins rather than from the Federal Reserve. Fixed-rate HELOCs exist but are uncommon, and some lenders will let you convert part of a variable balance to a fixed rate for a fee. If the possibility of your payment rising is the thing that would keep you up at night, the fixed loan is worth the slightly higher starting rate - and in September 2026 the gap was unusually small, with Curinos putting the average fixed home equity loan at 7.42% against an average HELOC at 7.09%.
What happens if I cannot make the payments?
Because both products are secured by your home, the consequence is materially worse than falling behind on a credit card or a personal loan. If you miss payments the lender can eventually foreclose. Your home equity loan or HELOC is a second lien, which means it is paid only after the first mortgage is satisfied - so a foreclosure by the second-lien holder usually only happens when there is enough value left above the first mortgage to make it worth pursuing, and a foreclosure by the first mortgage holder can wipe out the second lien entirely, leaving the second lender with a loss and, depending on your state's anti-deficiency and purchase-money rules, possibly a deficiency claim against you. Lenders can also freeze or reduce an unused HELOC when the home's value drops or your credit deteriorates, sometimes with no advance notice. If you see trouble coming, the steps that actually help are contacting the servicer early to ask about a modification or forbearance, and knowing that the Homeowner Assistance Fund and most state-level programs have wound down, so the options are largely at the lender's discretion now.
How much home equity can I borrow?
Not your full equity. Lenders cap the combined loan-to-value ratio, which counts your first mortgage and the new loan together against the home's appraised value. Most banks and credit unions allow 80% to 85% on a primary residence, and a narrower set of non-QM programs will go to 90% for strong borrowers. Published lender grids tie the cap to your credit score: around 80% at a 680 score, 85% at 700, and 90% at 740 or above. On a $425,000 home with $265,000 still owed, a 90% cap allows $382,500 of total liens, leaving $117,500 available - about 74% of the $160,000 in equity you actually have. Second homes typically run five to ten points tighter and investment properties tighter still, often 60% to 75%. Two things can reduce the number further: the lender's own appraisal, which governs rather than your estimate, and your debt-to-income ratio, where 43% is the common ceiling. There is also usually a floor - most lenders will not write a home equity product below about $10,000.
Is home equity loan interest still tax deductible?
Usually not, and the rules got stricter rather than looser. Before 2018, interest on up to $100,000 of home equity debt was deductible no matter what you spent the money on. The Tax Cuts and Jobs Act suspended that deduction for tax years 2018 through 2025, and the One Big Beautiful Bill Act, signed on July 4, 2025, made the suspension permanent rather than letting it sunset. Today the interest is deductible only if the proceeds were used to buy, build or substantially improve the home that secures the loan - which reclassifies it as acquisition debt - and only if you itemize on Schedule A. Qualifying debt is capped at the first $750,000 of combined mortgage and home equity debt, or $375,000 if married filing separately; loans originated on or before December 15, 2017 keep a grandfathered $1 million cap. Even then the deduction only helps if your total itemized deductions beat the standard deduction, which for 2026 is $32,200 married filing jointly and $16,100 single. Using a HELOC to consolidate credit cards, pay tuition or buy a car produces no federal deduction at all. This is general information, not tax advice.
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