Home equity loan & HELOC calculator
See how much equity you could borrow and what it would cost.
- Formula and assumptions shown
- Table and CSV export
- Runs in your browser
How it works
Lenders usually cap the total of all loans secured by a home at a percentage of its value, called the combined loan-to-value (CLTV). The most you could borrow is that percentage of your home's value minus what you already owe.
Maximum borrowing = max(0, home value × CLTV − mortgage balance). Loan payment = A × r ÷ (1 − (1 + r)^−n). HELOC draw payment = A × r; repayment payment amortizes A over the repayment months. r is the annual rate ÷ 12.
A home equity loan pays you a lump sum repaid in equal monthly payments. A HELOC is a credit line: during the draw period many require only interest, and when the repayment period starts the payment jumps to cover principal too. The calculator shows both HELOC payments so you can see that increase before it happens.
Assumptions
- The rate stays fixed as entered. Most HELOCs have variable rates, so real payments can change.
- For a HELOC, the full amount is drawn at the start and only interest is paid during the draw period.
- The CLTV cap is your entered assumption; lenders also consider credit, income, and an appraisal.
- Closing costs, annual fees, and tax effects are excluded.
Worked example
$400,000 home, $250,000 mortgage, 85% CLTV
The most you could borrow is $400,000 × 85% − $250,000 = $90,000. Borrowing $50,000 at 8.5% as a 15-year home equity loan costs $492.37 a month and $38,626.56 in interest. As a HELOC with a 10-year interest-only draw and 20-year repayment, the payment starts at $354.17 and rises by $79.74 to $433.91 when repayment begins.
Step by step
- Borrowing limit. $400,000 × 85% = $340,000 allowed across all home loans. $340,000 − $250,000 already owed = $90,000 maximum you could borrow.
- Equity and combined LTV. Current equity is $400,000 − $250,000 = $150,000. After borrowing $50,000, total debt is $300,000, and $300,000 ÷ $400,000 = 75% combined loan-to-value.
- Home equity loan payment. At 8.5% ÷ 12 = 0.7083% a month over 15 × 12 = 180 payments, $50,000 costs $492.37 a month.
- Home equity loan interest. 180 × $492.37 − $50,000 = $38,626.56 of interest over the 15 years.
- HELOC payments. During the 10-year draw, interest only: $50,000 × 0.7083% = $354.17 a month. The $50,000 then amortizes over 20 × 12 = 240 months at $433.91, a $79.74 increase. Interest totals $42,500.00 during the draw plus $54,138.79 during repayment, or $96,638.79.
How to read your result
The headline, Maximum you could borrow, is pure loan-to-value arithmetic: the home value times the combined limit, minus what is already owed. It does not check credit, income, or debt-to-income, and an appraisal can come in lower than the value entered, so a lender’s offer can be smaller. Current equity is the home value minus existing loans, and Combined loan-to-value after borrowing shows the share of the home that would be financed once the new loan is added.
For a home equity loan, Monthly payment is a fixed installment over the term and Total interest is what those payments cost beyond the amount borrowed. For a HELOC, the page shows the interest-only draw-period payment, the repayment-period payment, and the jump between them. HELOC total interest is much higher in the example because no principal is repaid for 10 years and the full repayment runs 30 years in total. The table and chart follow the balance month by month; for a HELOC it stays flat through the draw, then falls.
The rate is held fixed, which rarely matches a HELOC, since most carry a variable rate tied to an index. The HELOC model also assumes the whole amount is drawn on day one. Closing costs, annual fees, and tax treatment of the interest are excluded.
What changes the result most
- Combined loan-to-value limit
- At an 80% limit instead of 85%, the maximum drops from $90,000 to $70,000. Each 5 percentage points on a $400,000 home is $20,000 of borrowing room.
- Home value
- If the home is valued at $360,000 instead of $400,000, the maximum falls to $56,000, and borrowing $50,000 would put combined loan-to-value at 83.33%.
- Loan term
- Repaying the $50,000 home equity loan over 10 years instead of 15 raises the payment to $619.93 a month but cuts total interest to $24,391.41, which is $14,235.15 less.
- Interest rate
- At 9.5% instead of 8.5%, the 15-year loan payment rises by $29.74 to $522.11. For the HELOC, a rate of 10.5% lifts the draw payment to $437.50 and the repayment payment to $499.19, which is why testing a higher rate matters for a variable-rate line.
Questions
What CLTV limit should I use?
Many lenders cap combined loan-to-value around 80% to 85%, but limits vary by lender, credit, and property. Use the limit your lender quotes.
Why does a HELOC payment go up?
During the draw period many HELOCs require only interest. When the repayment period starts you must also repay principal over fewer years, so the payment rises, sometimes sharply.
Are HELOC rates fixed?
Usually not. Most HELOCs have a variable rate tied to an index, so payments can change. This calculator holds the entered rate fixed, so test a higher rate as well.
What happens if I can't repay?
Both products are secured by your home, so falling behind can put the home at risk. Compare the payments with your budget before borrowing.
How does a HELOC work?
A home equity line of credit is a revolving credit line secured by the home. During the draw period, often around 10 years, you can borrow up to the limit, repay, and borrow again, and many lines require only interest payments. When the draw period ends, borrowing stops and the balance is repaid with principal and interest over the repayment period, so the payment rises. Most HELOC rates are variable, so payments can also change with the index.
How does a home equity loan work?
A home equity loan pays a lump sum at closing, secured by the home, and is repaid in equal monthly installments over a fixed term, usually at a fixed rate. It works like a second mortgage: the lender records a lien behind the first mortgage, and the combined balance counts against the lender’s combined loan-to-value limit. Closing costs can apply, as with a first mortgage.
More in Home & mortgage
Sources
- CFPB: what is a home equity line of credit (HELOC)?
- CFPB: home equity loan versus HELOC
- FTC: home equity loans and home equity lines of credit
These references explain the concepts behind the calculation. They do not endorse this site. Estimates leave out any cost or condition you did not enter.