A walkthrough, end to end.
- 1
Enter your home's current value, your existing mortgage balance, and the lender's max LTV (typically 80–85%).
- 2
Add the rate and term for the home equity loan.
- 3
The calculator returns the maximum borrowable amount and the monthly payment.
Home equity loan math
Max combined loan-to-value (CLTV) = Lender Cap × Home Value. Maximum new loan = CLTV − existing mortgage. Monthly payment uses the standard amortization formula on the new loan amount.
What you can do with this.
Home renovation financing
$500K home, $300K mortgage, 80% CLTV → max $100K home equity loan. Use for major renovations that add value (kitchens, baths, additions) — typical cost $40K–$100K. Lower rate than personal loan, interest may be tax-deductible if used for home improvement.
Debt consolidation via home equity
Convert $30K credit card debt at 23% to home equity loan at 8%. Saves ~$10K interest over 5 years. Major caveat: putting house on the line for unsecured debt. Only do this with rock-solid payoff discipline.
Home equity loan vs HELOC
Loan: lump sum, fixed rate, fixed monthly payment. HELOC: revolving line of credit, variable rate, draw-as-needed. Loan for one-time expense; HELOC for ongoing or unknown total.
LTV cap variations
Most lenders: 80–85% CLTV. Specialty lenders go 90% (higher rate). 95%+ very rare. Lower CLTV = lower rate + more equity cushion. Avoid maxing out CLTV unless purpose justifies the risk.
Tax deductibility
Interest on home equity loans deductible (US) ONLY if proceeds used for home improvements (per Tax Cuts and Jobs Act). Used for non-home expenses, no deduction. The math: ~25% effective rate reduction from deduction at typical brackets.
Closing costs
Home equity loans typically have $300–$2,000 in closing costs (appraisal, title search, recording). Some lenders offer 'no-closing-cost' loans with slightly higher rate. Math the trade-off based on hold period.
Risk: foreclosure
Home equity loan is secured by your house. Default → foreclosure, exactly like a mortgage. Don't use to cover discretionary spending or projects you're not committed to seeing through.
Home equity loan 2026 — what's current
After Fed rate cycle, home equity loan rates run 7.5–9.5% — meaningfully cheaper than credit cards (23%) and personal loans (10–15%). Strong borrower with 50%+ equity gets the best rates.
Frequently asked.
Most lenders require 20% equity remaining after the new loan (so 80% CLTV cap). Some specialty programs allow lower. The calculator shows your maximum given the CLTV cap you enter.
Use case dependent. Home improvement (often yes — adds asset value, may be deductible). Debt consolidation (yes if rate spread is significant AND payoff discipline). Discretionary spending (almost always no — house at risk for non-essentials).
30–45 days typical from application to funding. Faster than refinancing primary mortgage but slower than personal loan. Some lenders offer 'fast' programs in 7–14 days.
No. Calculations run entirely in your browser.