Unlock Your
Home's Equity
See how much you can borrow, what it costs, and how it fits your finances.
Equity Availability
Principal vs. Interest Over Time
Amortization Schedule
| Year | Payment | Principal | Interest | Remaining Balance |
|---|
In two sentences: A home equity loan calculator estimates your fixed monthly payment on a lump-sum second mortgage, where the national average rate is roughly 7.4%–8.1% in mid-2026 depending on the term you choose. This guide breaks down the formula, current rate data by term length, and worked examples so you can see exactly what borrowing against your home’s equity would cost.
What Is a Home Equity Loan Calculator?
A home equity loan calculator estimates your fixed monthly payment for borrowing a lump sum against your home’s equity, repaid over a set term — typically 5, 10, or 15 years. Unlike a HELOC’s revolving credit line, a home equity loan works like a traditional installment loan: you receive the full amount upfront and repay it in equal fixed payments, making it easier to budget for a known expense like a major renovation or debt consolidation.
The Home Equity Loan Formula
How much you can borrow
Maximum Loan Amount = (Home Value × Max LTV%) − Current Mortgage Balance
Your monthly payment
M = P × [ r(1 + r)^n ] / [ (1 + r)^n − 1 ]
M = monthly payment
P = home equity loan amount
r = monthly interest rate (annual rate ÷ 12)
n = loan term in months
Note: This calculator and article are provided for general educational and informational purposes only and do not constitute financial or lending advice. Home equity loan rates and terms vary by lender and change frequently. Always confirm current terms directly with your lender.
Current Home Equity Loan Interest Rates (2026)
<cite index=”44-1″>The national average home equity loan interest rate is 8.08% as of late July 2026, according to Bankrate’s survey of the nation’s largest home equity lenders</cite>. <cite index=”38-1″>A separate industry data source, Curinos, puts the national average fixed-rate home equity loan at 7.36%, up from a 2026 low of 7.31% in late June</cite> — both figures assume applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) under 70%.
Rates by loan term
<cite index=”44-1″>Average rates for 5-, 10-, and 15-year, $30,000 home equity loans were 8.08%, 8.22%, and 8.20% respectively</cite> — notably, unlike most loans, home equity loan rates don’t always increase steadily with longer terms; the exact ordering can shift based on lender demand and market conditions at any given time.
Worked Examples
Example 1: A $50,000 home improvement loan
A $50,000 home equity loan at 8.08% APR over a 10-year (120-month) term:
Monthly rate = 0.0808 ÷ 12 = 0.006733
n = 120 payments
Monthly payment ≈ $610
Total interest paid ≈ $23,200
Example 2: Comparing 5-year vs. 15-year terms
Using the rates cited above for a $30,000 loan:
| Term | Rate | Monthly Payment | Total Interest |
|---|---|---|---|
| 5 years | 8.08% | ~$611 | ~$6,660 |
| 10 years | 8.22% | ~$367 | ~$14,040 |
| 15 years | 8.20% | ~$286 | ~$21,480 |
The 15-year term more than triples total interest compared to the 5-year term on the identical $30,000 loan amount, even though the rates themselves are nearly identical across all three terms.
Example 3: Calculating your maximum loan amount
On a $450,000 home with a $250,000 remaining mortgage balance and an 85% maximum combined LTV:
Max total borrowing = $450,000 × 0.85 = $382,500
Maximum home equity loan = $382,500 − $250,000 = $132,500
Step-by-Step: How to Use a Home Equity Loan Calculator
- Enter your home’s current value and your remaining mortgage balance to see your maximum available loan amount.
- Enter the specific amount you want to borrow.
- Enter a rate estimate based on current averages (7.4%–8.1%, adjusted for your credit tier) and your desired term.
- Compare a shorter and longer term side by side, since — as shown above — total interest can more than triple even when rates barely change between terms.
- Factor the fixed monthly payment into your budget with confidence, since <cite index=”43-1″>unlike a HELOC, a home equity loan’s rate and payment stay fixed for the entire term rather than fluctuating with market rates</cite>.
Home Equity Loan vs. HELOC vs. Cash-Out Refinance
<cite index=”68-1″>Home equity loans, HELOCs, and cash-out refinancing are three popular ways to borrow using your home as collateral, and with all three, the amount you can borrow depends on how much equity you have</cite>. The key distinction: <cite index=”68-1″>a cash-out refinance replaces your existing mortgage entirely, while a home equity loan and a HELOC are both additional debts taken on top of your current mortgage</cite>.
<cite index=”68-1″>Home equity loans and HELOCs may be quicker to get, but cash-out refinances often offer lower interest rates</cite> since they’re priced as first-lien mortgages rather than second liens. A home equity loan is generally the better choice when you want a fixed payment for a known, one-time expense and don’t want to disturb your existing mortgage rate.
When a Home Equity Loan Calculator Result Signals a Better Option
A home equity loan calculator is a decision-making tool, not just a payment estimator — and sometimes the smartest use of a home equity loan calculator is discovering that a home equity loan isn’t actually your best option once you see the full numbers.
Reading your home equity loan calculator results correctly
- If the term-length interest gap feels too large, as shown in the worked examples above, consider a shorter term even at the cost of a higher monthly payment — a home equity loan calculator makes that trade-off visible before you commit.
- If your maximum available loan amount barely covers your need, it may be worth waiting to build more equity rather than maxing out your combined LTV.
- If a HELOC’s variable rate is currently lower than the fixed home equity loan rate your calculator shows, and your borrowing need is uncertain or spread over time, a HELOC may fit better than a lump-sum home equity loan.
- If a full cash-out refinance rate is close to your current mortgage rate, running both a home equity loan calculator and a cash-out refinance calculator side by side can reveal which structure actually costs less in total interest.
Treating your home equity loan calculator as one input among several — rather than the final word — leads to a better borrowing decision overall.
Frequently Asked Questions
A home equity loan is a second mortgage — you keep your existing mortgage and add a new loan on top of it. A cash-out refinance replaces your entire mortgage with a new, larger loan and gives you the difference in cash. Cash-out refinancing is better when current rates are lower than your existing mortgage rate. Home equity loans are better when your existing mortgage rate is low and you don’t want to refinance the full balance at a potentially higher rate.
Most lenders require at least 15%–20% equity in your home after the loan — meaning your Combined Loan-to-Value (CLTV) ratio cannot exceed 80%–85%. You also typically need a credit score of 620+ (680+ for better rates), a debt-to-income ratio below 43%, and verifiable income. The more equity you have and the higher your credit score, the better your interest rate will be.
The minimum credit score for most home equity loans is 620, though lenders reserve the best rates for scores of 700–720 and above. At 620, you may qualify but will pay a higher interest rate. Some lenders offer home equity products for scores as low as 580 with compensating factors like very low CLTV and strong income. Improving your score by even 20–40 points before applying can meaningfully lower your rate.
Traditional home equity loans take 2–6 weeks from application to funding, similar to a mortgage refinance. The process includes application, appraisal (1–2 weeks), underwriting, and closing. Some online lenders like Figure have streamlined the process to as little as 5–10 days using automated valuations. Have your income documents, current mortgage statement, homeowner’s insurance, and property tax records ready to speed up the process.
When you sell your home, all liens — including your primary mortgage and any home equity loan — must be paid off from the sale proceeds before you receive any equity. If your home’s sale price doesn’t cover both loans, you would owe the difference. This is why over-borrowing against home equity is risky in a declining market. Always ensure your total mortgage and home equity debt remains safely below your home’s market value.
It can be, if the home equity loan rate is meaningfully lower than your existing debt (like credit cards), and you have the discipline not to run up new balances on the debt you just paid off. Keep in mind your home becomes collateral for the new loan.
<cite index=”39-1″>Homeowners typically need 15% to 20% home equity to qualify, and can often borrow up to 80% of their home’s value combined with their existing mortgage balance</cite>.
Yes — <cite index=”43-1″>unlike most HELOCs, home equity loans are typically fixed-rate products</cite> with predictable payments over the full term, similar to a traditional first mortgage.
Closing costs vary by lender but are generally lower than a full mortgage refinance, since the loan amount and underwriting scope are typically smaller.
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In summary, a home equity loan calculator is most useful for comparing term lengths side by side, since — unlike most loans — home equity loan rates stay relatively flat across terms while total interest cost still climbs steeply the longer you stretch repayment.
Note: This calculator and article are provided for general educational and informational purposes only and do not constitute financial or lending advice. Home equity loan rates and terms vary by lender and change frequently. Always confirm current terms directly with your lender.