EquityCalc

Home Equity Loan Calculator

Borrow against your home equity — see the monthly cost before you apply.

Loan amount

Interest rate (APR)

Loan term: 5 years

What you entered

Loan amount: $25,000Interest rate: 7.5% APRTerm: 5 years

1
Convert the annual rate to a monthly rate
r = 7.5% ÷ 12= 0.6250%
2
Total number of monthly payments
n = 5 years × 12= 60 payments
3
Apply the amortizing-loan formula
M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]= $500.95/mo
4
Total paid over the full term
$500.95 × 60 payments= $30,056.92
5
Total interest paid
$30,056.92 − $25,000.00 principal= $5,056.92

Result

Monthly payment: $500.95

Over 5 years you'll pay $5,057 in interest on top of the $25,000 you borrowed — $30,057 total.

Home equity loan payment at 8.5%

A home equity loan is a fixed-rate second mortgage taken as a lump sum. Each row amortises the amount borrowed at 8.5% over the term in the column heading.

Amount borrowed	5-year payment	10-year payment	15-year payment	20-year payment	Total interest over 15 years
$25,000	$512.91	$309.96	$246.18	$216.96	$19,313
$50,000	$1,025.83	$619.93	$492.37	$433.91	$38,627
$75,000	$1,538.74	$929.89	$738.55	$650.87	$57,940
$100,000	$2,051.65	$1,239.86	$984.74	$867.82	$77,253
$150,000	$3,077.48	$1,859.79	$1,477.11	$1,301.73	$115,880

Rates run above a first mortgage because the lender sits second in line if the property is sold or foreclosed, and that is also the risk to understand: the loan is secured on your home, so a payment problem puts the house at stake in a way an unsecured loan does not. Lenders typically allow total borrowing up to 80 to 85% of the property's value including the existing mortgage, so available equity is the constraint before affordability is. A fixed-rate lump sum like this differs from a HELOC, which is a variable-rate revolving line. Interest may be deductible when the funds are used to buy, build or substantially improve the home - check current rules.

Home equity loan vs HELOC

A home equity loan gives you a lump sum at a fixed rate with fixed payments — like a second mortgage. A HELOC is a revolving credit line with a variable rate; you draw as needed during the draw period (usually 10 years), then repay over 10–20 years. Both use your home as collateral.

How much equity can you borrow?

Most lenders let you borrow up to 80–85% of your home's value minus what you owe. If your home is worth $400K and you owe $250K, your available equity is $400K × 0.80 − $250K = $70K. Interest may be tax-deductible if funds are used for home improvements (consult a tax advisor).

Frequently asked questions

How much can I borrow with a home equity loan?

Typically up to 80–85% of your home's appraised value minus your current mortgage balance. Home worth $500K, owe $300K: available equity = $500K × 0.80 − $300K = $100,000. Some lenders go up to 90% CLTV for borrowers with excellent credit.

Is home equity loan interest tax-deductible?

Only if the funds are used to 'buy, build, or substantially improve' the home securing the loan (per the 2017 TCJA). Using a HELOC for a kitchen renovation: deductible. Using it to pay off credit cards or buy a car: not deductible. Combined mortgage + HELOC interest deduction is capped at $750K of total debt.

What is the risk of a home equity loan?

Your home is the collateral — if you can't make payments, you could face foreclosure. HELOCs with variable rates can see payment spikes when rates rise. You're also increasing your total debt-to-value ratio, which can be dangerous if home prices decline. Only borrow for value-adding purposes, not consumption.