Home Equity Loan & HELOC Calculator
How much equity you can borrow at the lender's combined loan-to-value limit, the fixed home-equity-loan payment and total interest, and the HELOC interest-only payment and the jump after the draw period.
| Your equity | — |
|---|---|
| Current loan-to-value | — |
| Available at the lender's limit | — |
| Home equity loan (fixed) — monthly payment | — |
| Total interest on the loan | — |
| HELOC — interest-only payment during draw period | — |
| HELOC — payment after the draw period | — |
| Combined LTV after borrowing | — |
| APR including fees | — |
In short
Available equity = home value × the lender's combined loan-to-value limit (usually 80–85%) − existing mortgage balance. A 450,000 home with 280,000 owed allows 80,000 at 80% CLTV; as a 15-year fixed loan at 8.5% that is 788 a month, or 567 a month interest-only as a HELOC during the draw period, rising to about 1,640 afterwards.
Who this is for: Homeowners sizing a home equity loan, HELOC, further advance or equity-release mortgage.
How lenders size a home equity loan
- Combined loan-to-value (CLTV): most lenders allow all loans on the home to total 80–85% of its value; the available amount is that limit minus what you already owe. A 450,000 home with 280,000 owed has 170,000 of equity but only 80,000 borrowable at 80% CLTV.
- Home equity loan: lump sum, fixed rate, fixed term (5–30 years). Best for a one-off cost — renovation, consolidating higher-rate debt.
- HELOC: revolving line, variable rate, 5–10-year draw period with interest-only payments, then 10–20 years of repayment. Flexible, but the payment can double when the draw period ends.
- Rates sit above first mortgages and below unsecured loans and cards. Using equity to clear 25% card debt can save a lot — but it converts unsecured debt into debt secured on your home.
- Closing costs are lower than a cash-out refinance, which is the alternative when your first-mortgage rate is also worth replacing.
See also: Rent vs Buy Calculator.
Assumptions
- Available = value × CLTV limit − existing balances; the loan is the lesser of the amount wanted and the available equity.
- Fixed loan: amortising payment over the term; HELOC: balance × monthly rate during the draw period, then amortising over the remaining months.
- APR with fees solved from net proceeds; lender appraisals and underwriting not modelled.
Worked example
Equity 170,000, current LTV 62.2%. Maximum loan: 360,000 − 280,000 = 80,000. Fixed loan payment 788 a month, total interest about 61,800, APR 8.82% with fees. As a HELOC: 567 a month interest-only for 10 years, then about 1,640 a month for the last 5 — a payment jump of over 1,000.
Frequently asked questions
How much equity can I borrow?
Usually up to 80–85% of the home's value minus your mortgage balance, subject to income and credit checks.
Home equity loan or HELOC?
Loan for a known one-off amount and a fixed payment; HELOC for staged spending (a long renovation) if you can handle a variable rate and the post-draw payment rise.
Is the interest tax-deductible?
In the US only when the funds improve the home securing the loan, within limits; elsewhere generally not. Check local rules.
Can I do this in the UK or UAE?
Yes — UK lenders offer further advances and second-charge mortgages with similar LTV caps; UAE banks offer equity-release mortgages, typically capped lower (around 50–60% LTV).
How much can I borrow on a 300,000 home?
At 80% CLTV, 240,000 minus your mortgage balance — 60,000 if you owe 180,000.
What is the HELOC payment after the draw period?
The balance amortises over the remaining years at the then-current rate, so the payment typically doubles or triples versus interest-only.
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