Home Equity Calculator: Calculate a Home Equity Loan or HELOC

The available-to-borrow figure is what your lender's maximum combined LTV allows after accounting for every loan already secured by the home. It is not the same as your total equity — lenders keep a buffer, typically 15% to 20% of the home's value, unborrowed.

The estimated payment shows what a fixed, fully amortizing loan at your entered rate and term would cost. If you are shopping a HELOC rather than a fixed home equity loan, treat this as a starting-period estimate rather than a lifetime payment, since HELOC rates and payment structures usually change over the life of the line.

Start with your home's current market value and the balances of any loans already secured against it. If you have only a first mortgage, leave the second lien balance at zero.

Enter your lender's maximum combined loan-to-value limit — 80% to 85% is typical for home equity loans and HELOCs, though it varies by lender and credit profile. The calculator subtracts your existing balances from that ceiling to show what is actually left to borrow.

Finally, enter the amount you want to draw along with an expected rate and term to see an estimated monthly payment, plus rough closing costs as a percent of the loan.

Equity and loan-to-value figures come directly from your inputs:

Equity = Home value − (First mortgage + Second lien)

Combined LTV = (First mortgage + Second lien) ÷ Home value

Maximum borrowing is capped by the lender's combined LTV limit:

Available to borrow = (Home value × Max CLTV) − Existing liens

The estimated payment uses the standard amortizing loan formula:

M = P × [ r(1 + r)^n ] / [ (1 + r)^n − 1 ]

• P — amount drawn, r — monthly rate, n — number of monthly payments

A home worth $450,000 with a $260,000 first mortgage has $190,000 of equity, or about 42%. At an 85% maximum combined LTV, the lender will allow total borrowing up to $382,500 — leaving roughly $122,500 available beyond the existing mortgage.

Drawing $40,000 at 8.5% over 15 years produces an estimated payment of about $394 per month, with roughly $800 in closing costs at a 2% fee, and pushes the combined LTV to about 67% — still comfortably under the lender's limit.

Combined LTV limits

Lenders set maximum CLTV based on credit score, property type and loan purpose — investment properties and cash-out for debt consolidation are often capped lower than for a primary residence.

Variable HELOC rates

Most HELOCs use a variable rate tied to a benchmark index plus a margin, so the payment can rise or fall over the draw and repayment periods.

Draw vs. repayment period

HELOCs typically allow interest-only payments during a draw period, then convert to a fully amortizing payment — often a much larger jump than this level-payment estimate shows.

Appraisal risk

A lender's appraisal can come in below your estimated home value, reducing both your equity and your maximum borrowing amount.

Credit and income underwriting

CLTV is a ceiling, not a guarantee — your approved amount can be lower if your credit score, debt-to-income ratio or documented income does not support the full amount.

• Confusing total equity with borrowing power

  Lenders never lend up to 100% of value; the CLTV cap leaves a meaningful chunk of equity untouched.

• Assuming a HELOC payment stays level

  Interest-only draw-period payments are usually much lower than the fully amortizing payment that follows — budget for the higher payment ahead of time.

• Overlooking an existing second lien

  Any current HELOC or second mortgage balance directly reduces how much more you can borrow under the same CLTV cap.

• Ignoring rate variability

  A fixed-rate estimate can understate a HELOC's cost if the underlying index rate rises during the draw or repayment period.

• Treating PMI and CLTV as the same thing

  PMI removal depends on the first mortgage's own LTV, not the combined LTV that includes a new home equity loan.

• Ask lenders for their specific maximum CLTV before assuming the common 80–85% range applies to your situation.
• Compare a fixed-rate home equity loan against a variable-rate HELOC if you need a lump sum rather than ongoing access to credit.
• Get a written estimate of the fully amortizing payment that follows a HELOC's draw period, not just the interest-only figure.
• Shop closing costs across lenders — home equity products vary more in fees than first mortgages do.
• Keep some equity cushion rather than borrowing to the full CLTV limit, in case home values soften.

Your lender's actual offer can differ from this estimate because of the appraised value, your credit profile, debt-to-income ratio, and whether the product is a fixed-rate loan or a variable-rate HELOC with a separate draw and repayment structure. Treat these figures as a planning estimate to compare offers against, not a commitment.

What this calculator assumes

• Home value is an estimate; an appraisal at application can move it in either direction.
• The combined LTV limit entered reflects your lender's actual underwriting cap for your credit profile.
• The payment estimate assumes a fixed rate and fully amortizing schedule, even though many HELOCs have a variable rate and an interest-only draw period.
• PMI removal is judged only against the standard 80% LTV threshold on the first mortgage.

What it does not account for

• HELOCs typically have a variable rate and an interest-only draw period followed by a repayment period — this calculator estimates a level, fully amortizing payment instead.
• Lender-specific credit score, income and appraisal requirements that can reduce your approved amount below the CLTV-based estimate.
• Annual fees, draw fees or early-closure fees some HELOC lenders charge.
• Property-specific limits, such as lower CLTV caps for investment properties or condos.

• Consumer Financial Protection Bureau — Home equity loans and HELOCs
• CFPB — What is a HELOC?