How this calculator works
Your borrowing limit is the home value times the maximum combined LTV, minus your mortgage balance. The loan you choose (up to that limit) is repaid with fixed monthly payments over the term.
Worked example
With the example values below: You may borrow up to, $122,500 (at 85% combined LTV). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Home value | $450,000 |
| Mortgage balance | $260,000 |
| Max combined LTV | 85% |
| Amount you want | $50,000 |
| Interest rate | 8.25% |
| Term | 15 years |
How a home equity loan works
A home equity loan is a second mortgage that pays you a lump sum, repaid with fixed monthly payments over a set term, often 5 to 30 years. It sits behind your first mortgage, which stays unchanged, so you keep your existing rate.
The amount you can borrow depends on equity. Lenders usually cap your combined loan-to-value (CLTV), all loans on the home divided by its value, at 80% to 90%. On a $450,000 home with a $250,000 mortgage, an 85% CLTV limit allows about $132,500.
Home equity loan vs. HELOC
A home equity loan gives you a fixed rate and a fixed payment from day one, which suits a single known expense such as a renovation or paying off debt. A HELOC is a revolving line with a variable rate and interest-only payments during the draw period, which suits expenses spread over time.
If your first mortgage rate is low, either option usually costs less than a cash-out refinance, which would reprice your whole balance.
What lenders look for
Closing costs typically run 2% to 5% of the loan, though some lenders cover them if you keep the loan open for a minimum period.
- Equity: enough that your CLTV stays at or below the lender's limit after the loan.
- Credit score: often 680 or higher, with better rates at 740 and above.
- Debt-to-income: usually 43% or lower including the new payment.
- Appraisal: lenders confirm the home's current value, sometimes with an automated valuation.
Risks and taxes
Your home secures the loan, so falling behind can lead to foreclosure, and if home prices drop you could owe more than the home is worth. Borrow for things that hold value or reduce costs, not everyday spending.
Interest is tax-deductible only if you itemize and use the money to buy, build or substantially improve the home that secures the loan. The debt consolidation calculator shows what replacing card debt would save.
Frequently asked questions
How much can I borrow with a home equity loan?
Usually up to 80% to 90% of your home's value minus what you owe on your mortgage. With a $450,000 home, a $250,000 balance and an 85% limit, that's about $132,500.
What is the monthly payment on a $50,000 home equity loan?
At 8.5% over 10 years, about $620 a month. Over 15 years it's about $492 a month, with more total interest.
Are home equity loan rates fixed?
Yes, most home equity loans have a fixed rate and fixed payment for the full term. HELOCs are the variable-rate option.
Is home equity loan interest tax-deductible?
Only if you itemize and use the money to buy, build or substantially improve the home securing the loan. Interest on money used for other purposes isn't deductible.
What credit score do I need for a home equity loan?
Most lenders look for 680 or higher, and some accept 620 with more equity. The best rates usually go to scores of 740 and above.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.