Home Equity Loan Calculator

Calculate monthly payments and total interest for a home equity loan. Compare fixed-rate home equity loans vs HELOCs for home improvements, debt consolidation, and major expenses.

🏠 Home Finance📐 Monthly Payment = Loan x [r(1+r)^n] / [(1+r)^n-1]

Home equity loan amount ($)

Interest rate (%)

Loan term (years)

Closing costs (estimated $)

Please enter valid values.

Formula & Reference

Variable	Formula	Units
Home Equity Loan Calculator	Monthly Payment = Loan x [r(1+r)^n] / [(1+r)^n-1]	$/month

Step-by-Step Examples

Example 1

$50K Home Equity Loan

$50,000 at 7.5%, 10 years, $1,000 closing.

Monthly: $593.38
Total interest: $21,206
Total cost: $72,206

✓ $593/month, $21K total interest

Example 2

$30K Debt Consolidation

$30,000 at 7.0%, 7 years.

Monthly: $456
Total interest: $8,303
Compare: credit card at 22% on $30K = ~$26K interest

✓ $456/month, saves vs CC debt

Example 3

$100K Kitchen Renovation

$100,000 at 7.75%, 15 years.

Monthly: $944
Total interest: $69,888

✓ $944/month, $70K total interest

Real-World Applications

🏠

Homeowners

Calculate home equity loan payments before borrowing.

💰

Financial Planners

Compare home equity loan vs HELOC vs cash-out refinance.

🏦

Lenders

Illustrate loan terms for home equity products.

📊

Mortgage Brokers

Help clients compare equity lending options.

Common Mistakes to Avoid

⚠️

Not comparing HELOC vs home equity loan

Home equity loan: fixed rate, lump sum, best for known one-time expenses. HELOC: variable rate, revolving line, best for ongoing projects. Compare: if rates rise, a fixed HE loan protects you.

⚠️

Borrowing too much equity

Using home equity for non-home-related purchases is risky - the loan is secured by your home. If you can't repay, you could lose your home. Only borrow amounts you can comfortably repay.

⚠️

Not considering cash-out refinance

If mortgage rates have dropped significantly from your current rate, a cash-out refinance may provide both a lower mortgage rate AND cash for your project. Compare total interest cost over your expected time in the home.

Frequently Asked Questions

What is a home equity loan? ▾

A lump-sum loan secured by your home equity at a fixed interest rate. Unlike a HELOC, you receive the full amount upfront and pay a fixed monthly payment. Also called a second mortgage.

Home equity loan vs HELOC? ▾

Home equity loan: fixed rate, fixed payment, lump sum - best for specific known expenses. HELOC: variable rate (often Prime + margin), revolving credit line, draw as needed - best for ongoing renovation projects.

What can I use home equity for? ▾

Common uses: home renovation (direct ROI), debt consolidation (lower rate than credit cards), college tuition, medical bills, and investment. Avoid using equity for vacation, cars, or consumable purchases.

What is the maximum amount I can borrow? ▾

Most lenders allow combined LTV (first mortgage + home equity loan) up to 80-85% of home value. With a $400K home and $200K mortgage, you could typically borrow $120,000-$140,000 (to reach 80-85% CLTV).

Are home equity loan interest rates fixed? ▾

Yes, home equity loans have fixed interest rates. HELOCs typically have variable rates that adjust with the prime rate. Currently (2024), home equity loan rates are 7-9% for borrowers with good credit.