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Home Equity Loan Calculator
This is your free home equity loan calculator. Use it to estimate your monthly payment, understand borrowing limits, and see how factors like APR and your loan term details determine your loan specifics
Whether you’re consolidating debt, financing a large purchase, or covering an unexpected expense, this calculator shows your estimated fixed monthly payment when you take advantage of the equity in your home.
Home Equity Loan Calculator
Home Equity Loan Calculator
Estimate your monthly payment on a home equity loan based on your loan amount, APR, and repayment term.
Loan & Home Details
Enter your home value, current mortgage balance, estimated interest rate, and the home equity loan amount you’re considering. Adjust your loan term to see how it can affect your monthly payments.
Estimated Payment
This is your estimated fixed monthly payment based on the loan amount, APR, and term you entered.
Compare Top Home Equity Loan Lenders
Once you have an idea of your payment, review our top-rated home equity lenders to find competitive rates, low fees, and flexible terms.
Highlights
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Also Explore:
- Personal Loan Calculator
- HELOC Calculator
- Debt Snowball Calculator
How Does a Home Equity Loan Work?
A home equity loan lets you borrow against the equity in your home. Your equity is the portion of your property, in this case, your home, that you truly own. It’s basically the difference between what your house is worth and what you owe on it.
Equity increases as you pay down your mortgage or as your home’s value rises. With a home equity loan, your lender gives you a lump-sum amount upfront, which you then repay over a predetermined length of time at a fixed interest rate. That means your monthly payment stays the same for the duration of your loan.
Your payments include principal and interest, and your repayment period is typically 5 to 30 years, depending on the lender and the loan product you choose. Because the loan is secured by your home, interest rates are usually lower than those of personal loans or credit cards.
However, to qualify, lenders generally require that you have enough equity in your home, measured by your loan-to-value (LTV) ratio, and that you have a qualifying credit score, based on specific lender requirements.
Lenders will often allow you to borrow up to an amount that equals 80% to 85% of the value of your home. This number is a combined amount that includes your current mortgage and the new loan, called your combined loan-to-value ratio, or CLTV.
What Can You Use a Home Equity Loan For?
Home equity loans are versatile financial tools, and you can use them for several purposes. The features that make home equity loans attractive are their:
- Fixed interest rates
- Predictable payments
- Relatively low APR compared to unsecured credit
Common Home Equity Loan Uses
Here are some examples of how consumers use the equity in their homes.
- Debt Consolidation: A home equity loan can help you combine high-interest debt into one lower-rate payment. Debt consolidation loans and 0% APR intro balance transfer credit cards also fall into this category.
- Making Large Purchases or Renovations: Home remodeling, new roofs, HVAC expenses, solar energy upgrades, accessibility renovations, and other big-ticket purchases often tag a home equity loan as the funding source. Personal loans are another solid option.
- Covering Emergency or Unexpected Expenses: A home equity loan can provide access to a significant amount of cash when you need it most. The fixed monthly payments ensure that your budget is predictable.
How to Calculate Home Equity Loan Payments
Home equity loan payments are based on a standard amortization formula, which calculates equal monthly payments across a set repayment term. The calculation depends on four inputs:
- Loan amount: How much money you want to borrow
- Interest rate (APR): The cost of your loan
- Loan term: typically 5 to 30 years
- Loan-to-value ratio (LTV): How much of your home’s value is currently secured by mortgage debt.
However, this calculator handles that math for you, and can instantly show you your estimated monthly payments based on those factors.
How Much Is a Monthly Payment on a $25,000 Home Equity Loan?
Your payment depends on your APR and repayment term, and can vary based on your creditworthiness and other financial factors. Here are typical (estimated) examples for a $25,000 home equity loan:
| APR | Term | Estimated Monthly Payment |
| 8% | 10 years | ~$303 |
| 9% | 15 years | ~$253 |
| 10% | 20 years | ~$241 |
Is an Equity Loan a Good Idea Right Now?
A home equity loan can be a smart financial move if your circumstances are right. However, timing can depend on your credit score, the equity you have in your home, and your options.
Because home equity loans use your home as collateral, they typically offer lower, fixed interest rates compared to credit cards and unsecured loans. However, they’re only available to you if you have sufficient home equity. Additionally, using your home as collateral carries the risk of losing your home if you’re unable to make the monthly payments on time.
If you need a revolving line of credit rather than a single lump sum, a HELOC can offer that flexibility. HELOCs can be handy for covering costs that are spread out over time, such as a large remodeling project.
A home equity loan may be a good choice if:
- You want predictable, fixed payments
- You have significant equity, usually 15 to 20% or more, in your home
- You prefer a lump sum instead of a revolving line of credit
- You need to finance a major expense at a lower interest rate than credit cards or personal loans
Consider other options if:
- Current interest rates are unusually high
- You may need to borrow multiple times, as a HELOC would allow
- You’re unsure of your financial stability in the future
- You plan to move soon
Home Equity Loan Pros and Cons
Pros
- Fixed interest rate for the life of the loan
- Predictable repayment schedule
- Often provides a much lower APR than unsecured debt
- Has multiple financial uses
Cons
- Closing costs typically apply
- Requires using your home as collateral
- Less flexible than a HELOC
Expert TipFrom our on-staff Certified Financial Educator: Some lenders, including several that partner with LendingTree, offer rate reductions (usually 0.25%) if you set up automatic payments. These autopay discounts stack up over a long loan term and reduce your total interest costs. The amount sounds tiny until you do the math. Borrowers can save nearly $2,000 over 20 years with that discount alone on a $100,000 home equity loan. |
Home Equity Loan vs. HELOC: Which Is Better?
A HELOC (home equity line of credit) is technically another form of home equity loan. However, it works quite differently.
Home Equity Loan
- Provides a one-time, lump-sum amount
- Almost always includes a fixed interest rate
- Fixed monthly payments throughout the life of the loan
- Best for large, one-time expenses
HELOC
- Acts as a revolving line of credit
- Interest rates can be fixed or variable, depending on your lender
- Many allow you to make Interest-only payments during the draw period
- Best for ongoing or unpredictable expenses
Check out our HELOC Payment Calculator for more information.
Frequently Asked Questions
What is the downside of taking a home equity loan?
While a home equity loan can be a powerful financial tool, it also has downsides. Because your home acts as collateral on the loan, you could be at risk of foreclosure if you can’t make the payments. Additionally, you’ll likely pay a few percentage points in closing costs, and a home equity loan includes a lump-sum draw that begins accruing interest immediately, which can increase the loan’s overall cost.
How much equity do I need to qualify?
Most lenders require you to retain at least 15% to 20% equity in your home after borrowing for a home equity loan. That means they typically cap your loan at a combined loan-to-value (CLTV) ratio of 80% to 85%. However, this number can vary significantly by lender.
Can I use a home equity loan for debt consolidation?
A home equity loan can be one of the most cost-effective debt consolidation strategies, especially if you’re carrying high-interest credit card balances. Home equity loans typically offer lower APRs than unsecured personal loans or credit cards, which can reduce your monthly payment and total borrowing cost. However, it’s essential to be aware that you’re converting unsecured debt into secured debt, meaning your home now backs the loan and can be at risk if you fail to make the regular monthly payments.
Conclusion
A home equity loan is one of the most predictable and affordable ways to borrow for a major expense, consolidate debt, or access cash at a lower APR than many alternatives. Use the calculator above to estimate your fixed monthly payment, compare APR scenarios, and explore how changes in loan amount, term, or interest rate can affect your payment. When ready, see our review of the best home equity loan providers.