Home equity calculator: what you can borrow and what it costs
Home equity is what your home is worth minus everything you owe on it. Lenders will usually let you borrow against part of that equity, through a home equity line of credit (HELOC) or a lump-sum home equity loan, up to a maximum combined loan-to-value (CLTV). This home equity calculator works out your equity, the most you could borrow at your lender’s CLTV limit, and then the payment for the amount you choose.
A HELOC is the part most calculators skip. It usually has a draw period (often about 10 years) when payments can be interest only, followed by a repayment period when you pay principal and interest, so the payment can jump. Rates are normally variable, so the tool lets you move the rate each year and shows a 2-point stress test. A table then tracks home value, mortgage, new borrowing and your equity year by year. For the CLTV ratio on its own, see the LTV calculator.
How to use the Home Equity & HELOC Calculator
- Pick your Country and enter the Home value, Mortgage balance and any other loans.
- Set the Lender maximum CLTV (80–90% is common) to see the most you could borrow.
- Choose a Credit line (HELOC) or Lump-sum home equity loan and enter the amount, rate and periods.
- For a HELOC, choose interest only or interest plus principal for the draw period and, if you like, a yearly rate change.
- Optionally add your mortgage rate, years left and home price growth to see equity over time.
Home Equity & HELOC Calculator features
Available equity
Value × maximum CLTV minus your mortgage and other loans, with CLTV before and after borrowing.
HELOC phases
Draw-period and repayment-period payments, the jump between them and the highest payment.
Rate changes
A yearly rate move and a plus-2-point stress test for variable-rate lines.
Home equity loan
A fixed-rate lump sum repaid over a set term.
Equity over time
Year-by-year value, balances, interest and equity.
Formulas and a worked example
Equity = home value − mortgage − other loans. Most you can borrow = value × maximum CLTV − mortgage − other loans. A monthly payment on a repaying balance is P × r ÷ (1 − (1 + r)−n), where r is the monthly rate and n the number of months left. Interest-only is simply balance × annual rate ÷ 12.
Example: a $400,000 home with a $250,000 mortgage has $150,000 of equity. At an 85% CLTV limit the total debt can reach $340,000, so you could borrow $90,000. Taking $50,000 at 8% on a HELOC with a 10-year interest-only draw period costs $333.33 a month; when the 20-year repayment period starts, the payment becomes $418.22. Total interest over the 30 years is about $90,400. As a 15-year fixed home equity loan, the same $50,000 costs $477.83 a month.
| Product | Rate | Payment pattern | Good for |
|---|---|---|---|
| HELOC | Usually variable | Interest only, then principal and interest | Staged or uncertain costs |
| Home equity loan | Usually fixed | Level payment | One known cost |
Limits and things to watch
- Your home secures the borrowing. Missing payments can put it at risk.
- Lender CLTV caps, credit score rules, fees and valuation costs differ. Rates shown are examples, not quotes.
- The model assumes the whole amount is drawn on day one. A real line is drawn in stages, so early interest is usually lower.
- Home values can fall as well as rise, which shrinks both your equity and the amount lenders allow.
- Related tools: the mortgage calculator for the main loan and the net proceeds calculator if you plan to sell instead.
Home Equity & HELOC Calculator FAQ
How much home equity can I borrow?
Multiply the home value by the lender’s maximum CLTV (often 80–90%) and subtract what you already owe. A $400,000 home at 85% with a $250,000 mortgage leaves $90,000.
How is a HELOC payment calculated?
During the draw period it is often interest only: balance × annual rate ÷ 12. In the repayment period it is the standard loan formula over the remaining months, so the payment is higher.
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving line you draw as needed, usually at a variable rate. A home equity loan is a single lump sum with a fixed rate and level payments.
Does this work in the UK?
Roughly. The UK has no HELOC as such, but a further advance or second-charge loan works on the same CLTV idea. Rates and caps differ, so treat the result as a guide.
Why does the payment jump after the draw period?
Interest-only payments do not reduce the balance. When the repayment period starts, the same balance must be repaid over fewer years, so each payment includes principal.
Is this financial advice?
No. It is a calculator using the numbers you enter. Ask lenders for quotes and a tax adviser about interest deductibility.