Home Equity Loan Calculator

Our home equity loan calculator figures if you’re likely to qualify for a home equity loan and what the max loan amount might be.

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Use this home equity loan calculator to see if a lender might give you a home equity loan and how much money you might be able to borrow. Home equity refers to how much of the house is actually yours, or how much you’ve “paid off.” Every time you make a mortgage payment, or every time the value of your home rises, your equity increases. As you build equity, you may be able to borrow against it.

» MORE:

A home equity loan uses your house as collateral. When considering your application for a home equity loan, lenders need to make sure the actually exists and that you have an appropriate loan-to-value ratio, or LTV. When your LTV is high, it means your equity is low, and lenders will be reluctant to let you borrow against it.

To determine how much you may be able to borrow with a home equity loan, divide your mortgage’s outstanding balance by the current home value. This is your LTV. Depending on your financial history, lenders generally want to see an LTV of 80% or less, which means your home equity is 20% or more. In most cases, you can borrow up to 80% of your home’s value in total. So you may need more than 20% equity to take advantage of a home equity loan.

An example: Let’s say your home is worth $200,000 and you still owe $100,000. If you divide 100,000 by 200,000 you get 0.50, which means you have a 50% loan-to-value ratio, and 50% equity. Lenders that allow a combined loan-to-value ratio of 80% may let you borrow another $60,000. That would bring the amount you owe to $160,000, which is 80% of the $200,000 home value.

The tool will immediately calculate your current loan-to-value ratio. If you own at least 20% of your home (an LTV of 80% or less), you’ll probably qualify for a home equity loan, depending on your financial track record.

The calculator will also show the dollar amount you’ll likely be able to borrow so you can determine whether a home equity loan meets your financial needs.

The calculator on this page tells you how much you may be able to borrow, but it's not a home equity loan payment calculator that figures monthly payments on a loan.

A home equity loan has equal payments every month. The monthly payments depend on three factors:

Both a home equity loan and a HELOC are ways to cash in on your home’s equity, but they work differently.

A home equity loan gives you all the money at once with a fixed interest rate. HELOCs act more like credit cards; you can borrow what you need as you need it, up to a certain limit. HELOCs have adjustable or variable interest rates, meaning your monthly payment can change, but you only pay interest on the amount you draw.

You’ll generally be eligible for a home equity loan or HELOC if:

» MORE:

Home equity loan rates vary among lenders and according to your financial situation. NerdWallet's provides average interest rates by national and regional home equity lenders.

Just because you meet the requirements for a home equity loan or HELOC doesn’t mean it’s a wise choice. Borrowing against your home’s equity is always risky, as the lender can foreclose on your home if you fail to make payments.

Financial experts recommend tapping home equity only when it helps add value to your home, such as repairs or remodeling, but other reasons may include:

Before choosing between a home equity loan or HELOC, be sure you understand the total cost versus benefit, including interest rates, fees, monthly payments and potential tax deductions.

» MORE:

If you’re sure all the information entered into the home equity loan calculator is correct and it shows you have less than 20% equity in your house, you probably won’t be eligible for a loan or HELOC at this time. You may be able to speed up equity growth by:

More from NerdWallet

On a similar note...
Dive even deeper in Mortgages