Home Equity Loan Calculator

This home equity loan calculator can help you determine how much you might be able to borrow with a home equity loan. With this information, you can begin to decide if a home equity loan is right for you. 

Start the process by entering the following data: 

• ZIP code: Provide your  ZIP code to get offers from lenders that service your area.
• Estimated home value: Enter your best estimate of your home’s current value. 
• Estimated mortgage balance: Your latest mortgage statement lists the remaining balance on your mortgage.
• Credit score: Lenders use your credit score to determine your eligibility for a home equity loan and — if you qualify — your interest rate.  

Note: The calculator determines your likely eligibility for a home equity loan by computing your loan-to-value ratio (LTV), or your loan balance compared to your home’s value. Your LTV  also helps determine your interest rate, if you qualify.

Whether you qualify for a home equity loan and how much you might be able to borrow depend on: 

Your home’s value: Your home’s value is the foundation of the entire calculation. Lenders usually lend up to 80% or 85% of your home’s appraised value, minus your mortgage balance. Even a small change in value can notably increase or decrease how much you may be able to borrow. Your lender typically confirms your home value with an appraisal or an AVM (automated valuation model).  

Current mortgage balance: This is what you still owe on your home. It’s divided by your home value to determine your available equity and subtracted from your home value to determine your potential loan amount. The lower your mortgage balance, the more borrowing power you may have.  

Your home equity: This is the value of your home minus what you still owe on your mortgage. Your equity may increase  when make a mortgage payment and if your home’s value rises. 

Lenders generally insist you to have at least 20% equity in your home to take out a home equity loan — but even if you have a lot of equity, you won’t be able to tap into all of it. Most lenders require you to keep 15% to 20% equity in your home. And the more equity you retain in your home, the lower your rate is likely to be, as it reduces risk for the lender. 

Credit score: Your credit score heavily affects your chance of approval, as well as the interest rate you’ll pay. Borrowers with scores of 700 and above tend to land the most competitive terms. 

This calculator determines whether or not you may qualify for a home equity loan using your LTV. Here’s how it works:    

LTV = Loan balance/Home value ​× 100

For example, say your home’s current value is $410,000, and you have a $220,000 balance remaining on your mortgage. Using this formula, you’ll find that your LTV will be about 54%. This should help you qualify for a home equity loan with most lenders. =

Additionally, the calculator determines how much you may be able to borrow if you qualify for a home equity loan. Most lenders let you borrow 80% to 85% of your home’s appraised value, minus your mortgage balance — this calculator assumes 80%. Using the example above, this is how much you may qualify to borrow:

$410,000 x .8 = $328,000

$328,000 - $220,000 = $108,000

Keep in mind, the exact amount you qualify for also depends on your financial profile, including your credit score and income. And a few lenders may let you tap a higher amount of your home’s value, 90% or more. 

The calculator estimates the amount you may be eligible to borrow. This result can help you decide whether you could borrow enough with a home equity loan for your needs.  

Beyond that, your borrowing amount can help you imagine what a home equity loan would look like for you. You can start to research the rates you might receive and what your monthly payment might be. 

If the calculator determines your LTV is higher than 80%, it won’t return a result — and you may have a hard time finding a home equity lender. But you still have some alternatives:

• Look for home equity lenders that accept higher LTVs. Some may lend to borrowers with LTV ratios as high as 90%.
• Consider other borrowing options, such as personal loans. Keep in mind that rates are often almost double than what you’d pay with a home equity product. 

While the results can help you get started, you’ll still need to go through the full approval process. That will include verification of your income, debts, credit score and other financial details.

Is it a good time to get a home equity loan?

Home equity loan rates are at their lowest levels in about three years, giving homeowners a relatively affordable way to borrow. At the same time, many homeowners are locked into ultra-low, pandemic-era mortgage rates. With current mortgage rates staying stubbornly high, many homeowners are choosing to renovate their homes instead of moving.  

“Perhaps you really like your home and it just needs a new roof, a new kitchen,” says Ted Rossman, principal analyst at Bankrate. “Location is one thing you can't change, so if you like your area, you're going to be less likely to move…. Also, mortgage rates are a lot higher than they were 5 or 6 years ago. So if you're currently sitting on a 3.25% fixed-rate mortgage, you might want to stay put and renovate rather than trading that for a 6%-plus rate elsewhere.”

Before moving forward with a home equity loan, it’s worth thinking through a few key points: 

Compare loan options: Home equity loans aren’t the only home equity product out there. A home equity line of credit often has a variable rate and lets you borrow a little at a time, up to your approved limit. On the other hand, a home equity loan gives you a lump sum of cash with a fixed rate. 

You might also consider a cash-out refinance, which replaces your current loan with a new, larger one and lets you pocket the difference. You may be able to borrow more with a cash-out refi than with a home equity loan or HELOC. 

Check current rates: Rates can vary widely between lenders, so shopping around with at least three to five lenders can save you money.

Factor in closing costs and fees: Think beyond home equity rates, as fees add up and affect the total cost of borrowing.

Think long term: Borrowing against your home increases your overall debt and puts your property at risk if you can’t repay. Make sure any borrowing you do fits into your overall financial plan. 

Plan how you’ll use the funds: Whether consolidating debt, paying for renovations or paying for an unexpected expense, a plan can help ensure you’re borrowing for the right reasons.

How to calculate your home equity: If you’d rather skip the calculator, you can read this step-by-step guide on understanding, calculating and using your home equity responsibly. 

Home equity loan rates: Interest rates directly impact your borrowing costs. Check current home equity rates or HELOC rates to help decide which product makes more sense for you.