Home Equity Loan Calculator

A home equity loan calculator is a tool that helps borrowers estimate the costs associated with borrowing against the equity in their home. Home equity loans allow homeowners to borrow money using their home as collateral. These loans typically have fixed interest rates and terms.

Home Equity Loan: Paying Back a Fixed Amount Periodically

Use this calculator for basic calculations of home equity loans, or click the links for more detail on each.

Loan Amount
Loan Term	years months
Interest Rate
Compound
Pay Back

Results:

Payment Every Month	$544.24
Total of 120 Payments	$65,308.80
Total Interest	$15,308.80

Home Equity Line of Credit (HELOC): Paying Back a Lump Sum Due at Loan Maturity

Loan Amount
Loan Term	years months
Interest Rate
Compound

Results:

Amount Due at Loan Maturity	$98,617.97
Total Interest	$23,617.97

Home Equity Loan with Interest-only Payments: Predetermined Amount Due at Loan Maturity

Use this calculator to compute the initial value of a home equity loan based on a predetermined face value to be paid back at loan maturity.

Predetermined Due Amount
Loan Term	years months
Interest Rate
Compound

Results:

Amount Received When the Loan Starts	$45,943.72
Total Interest	$54,056.28

Home Equity Loan: Fixed Amount Paid Periodically

Home equity loans are installment loans that allow homeowners to borrow against the equity in their home. These loans typically have fixed interest rates and terms, with regular monthly payments that include both principal and interest.

Home Equity Line of Credit (HELOC): Single Lump Sum Due at Loan Maturity

A HELOC is a revolving line of credit that allows homeowners to borrow against their home equity as needed. During the draw period, borrowers can withdraw funds up to their credit limit and typically only pay interest on the amount borrowed.

Home Equity Loan with Interest-only Payments: Predetermined Lump Sum Paid at Loan Maturity

Some home equity loans offer interest-only payment options during an initial period. During this time, borrowers only pay the interest on the loan, with the full principal amount due at the end of the interest-only period.

Home Equity Loan Basics for Borrowers

Interest Rate

Home equity loan interest rates are typically lower than unsecured personal loan rates because they are secured by the borrower's home equity. Rates can be fixed or variable depending on the type of loan.

Loan Term

Home equity loan terms typically range from 5 to 30 years. Longer terms result in lower monthly payments but higher total interest costs over the life of the loan.

Loan-to-Value Ratio

Lenders typically limit home equity loans to a certain percentage of the home's value minus any existing mortgage balances. This is known as the loan-to-value (LTV) ratio.

Advantages of Home Equity Loans

Lower Interest Rates: Secured by home equity, rates are typically lower than unsecured loans
Potential Tax Benefits: Interest may be tax deductible for certain uses
Lump Sum Access: Home equity loans provide a lump sum of cash upfront
Predictable Payments: Fixed-rate loans have consistent monthly payments
Flexible Use: Funds can be used for various purposes including home improvements, debt consolidation, or major expenses

Home equity loans can be an effective way to access funds for major expenses while taking advantage of potentially lower interest rates. However, borrowers should remember that their home serves as collateral, putting it at risk if they fail to make payments.

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