Home Equity Loan Calculator
Our calculator estimates the maximum amount you’re likely to qualify for, along with your monthly payments.
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Use this calculator to find out how much money you might be able to borrow with a home equity loan and how much it might cost.
» MORE: See today’s home equity rates
Home equity is the amount of your house you’ve “paid off.” Every time you make a mortgage payment or the value of your home rises, your equity increases.
As you build equity, you may be able to borrow against it with a home equity loan. With this kind of loan, you receive the money in one lump sum.
HELOC & Home Equity Loans from our partners
on New American Funding
580
$750,000
on New American Funding
on FourLeaf Federal Credit Union
670
$1,000,000
on FourLeaf Federal Credit Union
on Rocket Mortgage
680
$350,000
on Rocket Mortgage
on Spring EQ
Spring EQ
4.5
NerdWallet rating4.5
NerdWallet rating640
$500,000
on Spring EQ
HELOC & Home Equity Loans from our partners
on New American Funding
580
$750,000
on New American Funding
on FourLeaf Federal Credit Union
670
$1,000,000
on FourLeaf Federal Credit Union
How does a home equity loan work?
A home equity loan lets you borrow from the equity that you’ve built in your home through mortgage payments and appreciation. You receive the money all at once and pay it back at a fixed interest rate.
This makes home equity loans a solid choice if you know exactly how much you’ll need to borrow. For example, you might use a home equity loan to replace your roof or put in new carpet.
To find out how much you may be able to borrow with a home equity loan, divide your remaining mortgage balance by your home’s current value. This is your loan-to-value ratio, or LTV. You can find the remaining balance on your loan on your most recent mortgage statement. Your most recent home appraisal can give you an idea of its current value.
Depending on your financial history, lenders usually want to see an LTV of 80% or less, which means you have at least 20% equity in your home. In most cases, you can borrow up to 80% of your home’s value in total.
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 $60,000 more. That would bring the amount you owe to $160,000, which is 80% of the $200,000 home value.
» MORE: How a home equity loan works
How much is the payment on a home equity loan?
Your home equity loan payments are determined by three things:
The amount you borrow
Your interest rate
Your repayment term
For example, if you have a $100,000 home equity loan with a 10% interest rate and a 30-year term, your monthly payments would be about $878.
Should I choose a home equity loan or a HELOC?
A home equity line of credit, or HELOC, is another way to borrow from your home equity.
HELOCs are similar to credit cards, in that you can borrow what you need as you need it, up to a certain limit. Unlike credit cards, you should only use a HELOC for major expenses instead of everyday purchases — remember, this line of credit is secured by your house. HELOCs usually have a variable interest rate, meaning that it moves up and down with the market.
Choosing between a home equity loan or HELOC comes down to your preferences: when you’d like to receive the money and whether you’re comfortable with a variable rate.
Features of the loan | HELOC | Home equity loan |
|---|---|---|
Loan funding | You can draw funds as needed, up to a certain limit (typically a percentage of your equity). | You receive a lump sum at closing (typically a percentage of your equity). |
Terms | Begins with a draw period (typically 10 years) with interest-only minimum payments. This is followed by a repayment period (often up to 20 years) that requires you to pay back principal and interest. | Repayment periods are often up to 30 years. Minimum payments include both interest and principal. |
Rates | Variable (though some lenders offer a fixed-rate option) | Fixed |
Borrowing limits | You can typically borrow between 80%-85% of the equity in your home. Some lenders allow for more. Use NerdWallet’s HELOC calculator for personalized details. | You can typically borrow between 80%-85% of the equity in your home. Some lenders allow for more. |
Lenders |
How to get a home equity loan
You’ll generally be eligible for a home equity loan or HELOC if:
You have at least 20% equity in your home, as determined by an appraisal.
Your debt-to-income ratio is between 43% and 50%, depending on the lender.
Your credit score is at least 620.
Your credit history shows that you pay your bills on time.
If you meet these requirements and know how much you need to borrow, you’re ready to start reaching out to lenders. If the lender that financed your primary mortgage offers home equity loans, that can be a good place to start your search; however, we recommend that you compare offers from a few lenders to get the best available rate and terms.
Are home equity loans a good idea?
Borrowing against your home’s equity is always risky because the lender can foreclose on your home if you fail to make payments. Financial experts recommend using your home equity only when it helps add value to your home, such as for repairs or remodeling. In extreme cases, you might turn to a home equity loan to help in a financial emergency.
How do I grow my home's equity?
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 may not be eligible for a home equity loan or HELOC at this time. You may be able to speed up equity growth by:
Refinancing into a shorter-term mortgage
Making home improvements that increase value
Paying a little extra toward your mortgage principal every month