The Home Equity Loan Calculator estimates the monthly payment of a fixed-rate home equity loan and how much equity you can borrow against.
Monthly payment: $1,433.48
| Monthly payment | $1,433.48 |
| Total of 180 payments | $258,026.06 |
| Total interest | $108,026.06 |
| Closing costs | $0.00 |
| Real APR | 8.000% |
| Maximum you can borrow | $230,000.00 |
| Home equity | $350,000.00 |
| Current loan-to-value | 41.67% |
A home equity loan is a second mortgage that lets you borrow a lump sum against the equity in your home (its value minus what you owe). It has a fixed rate and fixed monthly payments, typically over 5 to 30 years. Common uses are home improvements, debt consolidation and large expenses.
Lenders typically allow a combined loan-to-value (CLTV) of 80–85%. Maximum loan = home value × LTV − mortgage balance. For a $600,000 home with $250,000 owed at 80%, that is $480,000 − $250,000 = $230,000.
The payment uses the standard amortization formula. $150,000 at 8% for 15 years is about $1,433 a month. Closing costs of 2–5% may apply; if deducted from the loan, the real APR rises.
A home equity loan gives all the money at once at a fixed rate. A HELOC is a revolving line with a variable rate, useful for ongoing expenses. Both use your home as collateral, so failing to pay could lead to foreclosure.
Is the interest tax-deductible? Only if used to buy, build or substantially improve the home.
What credit score do I need? Usually 620–680 or higher.
How long does approval take? Often two to six weeks, including an appraisal.