Home Equity Loan Calculator
A home equity loan is a second mortgage paid out as a single lump sum, with a fixed rate and a fixed term. The amount you can borrow is bounded by your lender's CLTV (combined loan-to-value — first mortgage plus any second) cap — your first mortgage balance plus the new equity loan as a share of the home's value — typically 80%, sometimes 85% or 90%. Closing costs can be paid upfront or financed into the loan; this calculator shows both paths.
Lump-sum equity loan amount.
Annual rate on the equity loan.
Origination, appraisal, title, and lender fees.
Otherwise, costs are paid out of pocket at closing.
Used to compute max borrowing capacity.
Balance on your senior mortgage.
80% is the conventional standard for HELOANs.
15-yr at 8.50% · APR 9.373%
$1,477 / month
- Principal
- $150,000
- Interest
- $115,880
- Closing costs
- $7,500
- Cash received
- $142,500
- Total cost of loan
- $123,380
- Total home equity
- $250,000
- Current LTV
- 50.0%
- Max borrow at 80% CLTV
- $150,000
Free during pilot
How a home equity loan works
Monthly payment is the standard amortization formula at your stated rate. If you finance closing costs into the loan, the principal we amortize is the loan amount plus closing costs, and the cash you receive at closing equals the loan amount. If you pay closing costs upfront, principal equals the loan amount and cash received is loan amount minus closing costs.
APR ≈ rate that makes PV(payments) = cash received
Either way, the APR solves to the same rate — APR captures the true cost of borrowing regardless of whether closing costs were rolled in or paid up front. We solve for it with Newton's method.
How much you can borrow
Lenders cap the combined LTV — senior mortgage balance plus new equity loan — at a percentage of the home's value. 80% is the conventional standard; some lenders extend to 85% or 90% with credit and DTI compensating factors (other strengths in your file, like reserves).
Max borrow = (Home value × CLTV cap) − Existing balance
Frequently asked questions
What is a home equity loan and how is it different from a HELOC?
A home equity loan — sometimes called a HELOAN or second mortgage — gives you a lump sum of cash at a fixed interest rate with a fixed repayment term. You get all the money upfront and make the same payment every month until it's paid off. A HELOC (home equity line of credit) is a revolving line you can draw from and repay repeatedly, usually with a variable rate. This calculator covers the fixed-rate lump-sum loan.
How much can I borrow with a home equity loan?
Lenders cap the combined loan-to-value (CLTV) — your existing mortgage balance plus the new equity loan, as a share of your home's value. The conventional standard is 80%, though some lenders allow 85% or 90% with strong credit and income. This calculator lets you choose the CLTV cap and shows the estimated maximum you can borrow given your home value and current mortgage balance. Actual approval depends on credit, income, and lender requirements.
What does APR mean for a home equity loan and why is it different from the interest rate?
APR — annual percentage rate — is the true cost of borrowing expressed as a yearly rate, including both the interest rate and the closing costs (origination fees, appraisal, title). Because closing costs are real money you're paying to get the loan, APR is a more accurate number for comparing two loans than the interest rate alone. This calculator estimates APR by treating all closing costs as finance charges; the APR your lender discloses under federal Regulation Z may differ slightly depending on which fees they include.
Is it better to finance closing costs into the loan or pay them upfront?
Paying upfront means you don't add to the loan balance — your monthly payment is lower and you pay less interest over time. Financing them into the loan reduces the out-of-pocket cost at closing but increases the amount you're paying interest on for the full term. This calculator shows both scenarios so you can compare the total cost of the loan under each path. Neither is universally better; it depends on how long you plan to hold the loan and your current cash position.
Related calculators
Estimates only — not a lending offer. Home equity loan rates and combined-LTV caps depend on credit, debt-to-income, occupancy, and lender overlays. A home equity loan itself carries no PMI. We model APR with all closing costs treated as finance charges, which may differ from the APR your lender discloses under Reg Z. Methodology last reviewed: May 26, 2026.