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Mortgage & Loans
Home Equity Loan Calculator — Max Loan, Payment & Total Interest
Borrow one lump sum at a fixed rate and repay it with one predictable monthly payment for the whole term
A home equity loan is the fixed-rate, lump-sum way to tap the value in your home. You borrow one set amount up front, receive it as a single deposit, and pay it back in equal, fixed monthly payments over a chosen term — typically 10, 15, or 20 years. The rate is locked at closing, so the payment is the same every single month until the loan is gone. That one-and-done structure is why people reach for it on a defined, one-time cost: a kitchen remodel with a firm quote, rolling several balances into one debt-consolidation payment, or a known medical or tuition bill. Because it sits behind your existing mortgage as a second lien, it's also called a second mortgage — but it changes nothing about your first loan; it simply adds its own steady payment on top.
This is the calculator's job in one line: tell you the biggest lump sum you can borrow, then show you the single fixed payment that lump sum creates and the total interest it costs. To find the max loan, a lender looks at your combined loan-to-value (CLTV) — the first mortgage plus this new loan, divided by the home's value — and caps it at a set ceiling, commonly 85% (some allow 80%, a few stretch to 90%). Rearranged for the dollar amount you can take, that ceiling works out to:
Max loan = home value × (LTV ÷ 100) − what you still owe on the first mortgage.
Worked example. Your home appraises at $400,000, the first-mortgage balance is $250,000, and the lender allows 85% CLTV. Multiply 400,000 by 0.85 to get a $340,000 combined-debt ceiling, then subtract the $250,000 you already owe — your max lump sum is $90,000. (Note your raw equity is $150,000, but the LTV ceiling, not the equity, sets the cap.)
Now the part that makes this loan predictable. The fixed payment comes straight from the amortization formula:
M = L × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
where L is the lump sum, r is the monthly rate (APR ÷ 12 ÷ 100), and n is the total payments (years × 12). Take that $90,000 at 7.5% over 15 years: r = 0.00625 and n = 180 give a flat $834.31 every month. Across all 180 payments you'd repay about $150,176, so the total interest is roughly $60,176 — a number you can lock in today, since nothing about the payment changes later.
If you'd rather draw money in pieces over time at a variable rate instead of taking it all at once, that's a revolving line of credit — see our HELOC Calculator for that alternative. Otherwise, use this tool to size your one-time lump sum, its fixed payment, and lifetime interest before you apply.
This tool provides informational estimates only, not a loan offer or financial advice; your actual LTV limit, rate, term, and payment are set by your lender.
📖 See also: What Is a HELOC and How Does It Work?
Calculator
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📰 Formula
• Available equity = home value − mortgage balance • Max loan = (home value × LTV ÷ 100) − mortgage balance • Monthly rate r = APR ÷ 12 ÷ 100 • Number of payments n = years × 12 • Monthly payment M = L × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1) • Total interest = (M × n) − L
📰 Formula
• Available equity = home value − mortgage balance • Max loan = (home value × LTV ÷ 100) − mortgage balance • Monthly rate r = APR ÷ 12 ÷ 100 • Number of payments n = years × 12 • Monthly payment M = L × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1) • Total interest = (M × n) − L
🧪 Worked examples
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Example 2
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Example 3
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Example 4
⚠️ Common mistakes
- Confusing a fixed lump-sum home equity loan with a revolving, variable-rate HELOC.
- Assuming you can borrow your full equity — the LTV cap limits it to far less.
- Forgetting the first mortgage balance counts toward LTV, not just the new loan.
- Dropping the whole APR into the amortization formula — it has to become a per-month decimal first (7.5% ÷ 12 ÷ 100 = 0.00625), or the payment comes out wildly wrong.
💡 Tips
- A home equity loan locks your rate and payment, so it's the safer pick when you want a predictable bill.
- A shorter 10- or 15-year term raises the monthly payment but slashes total interest versus 20 years.
- Borrow only what the project needs — every extra dollar is fixed debt you pay interest on for the full term.
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❓ Frequently asked questions
How big a lump sum can I borrow with a home equity loan?
Take the home's value times your lender's LTV ceiling, then subtract the first-mortgage balance. On a $400,000 home with $250,000 owed and an 85% limit: 400,000 × 0.85 = 340,000, minus 250,000 = a $90,000 one-time lump sum.
Why is the monthly payment the same every month?
Because the loan is fixed-rate and fully amortized. The amortization formula M = L × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1) — with r = APR ÷ 1200 and n = years × 12 — produces one level payment that covers interest plus principal identically each month for the whole term.
Should I pick a home equity loan or a HELOC?
Choose this fixed lump-sum loan when you know the exact amount and want one unchanging payment, like a remodel with a firm quote. Choose a HELOC when you need to draw funds in stages at a variable rate. Our HELOC Calculator models that revolving option.
Can I take more money later if I run short?
No — that's the trade-off of the lump-sum structure. You get the full amount once at closing, and there's no re-borrowing as you repay. If you might need more in stages, a revolving line like a HELOC fits better. Size the lump sum carefully before you apply.
How much total interest will I pay over the term?
Multiply the fixed payment by the number of payments, then subtract the lump sum. A $90,000 loan at 7.5% over 15 years runs $834.31 × 180 ≈ $150,176, so about $60,176 of that is interest — a figure locked in the day you close.
How much equity do I need to qualify?
Lenders generally want you to keep 15–20% equity after the new loan, the mirror image of an 80–85% LTV ceiling. If your first-mortgage balance already exceeds that share of the home's value, there may be no room left to borrow a lump sum.
Does the lump sum change my first mortgage payment?
No. A home equity loan is a separate second lien, so your first mortgage's rate, balance, and payment stay exactly as they are. This loan simply adds its own fixed monthly payment on top, and both balances together count toward your LTV ceiling.
How does a shorter term change the fixed payment?
A shorter term spreads the same lump sum over fewer payments, so each one is larger — but you pay far less total interest. The $90,000 example costs about $60,176 in interest over 15 years; stretching it to 20 lowers the payment yet adds thousands more in interest.
Is the interest tax-deductible?
It can be, but only when the lump sum is used to buy, build, or substantially improve the home securing the loan, and only if you itemize. Interest on funds used for other purposes generally isn't deductible. Check current IRS rules or a tax professional for your case.