Calculate how much you can borrow with a home equity loan based on your home's value and existing mortgage. Get instant estimates for loan amounts, monthly payments, and total costs. Free calculator with detailed analysis.
Use recent appraisal or online estimate (Zillow, Redfin)
620+ required, 740+ gets best rates and terms
Current rates: 7-9% (varies by credit score)
Common terms: 5, 10, 15, 20, or 30 years
Home equity is the difference between your home's current market value and what you owe on your mortgage. It builds as you pay down your loan and as your home appreciates in value.
Most lenders allow you to borrow up to 80-85% of your home's value minus your existing mortgage. Credit score 740+ typically qualifies for the highest loan amounts and best rates.
Home equity loans have fixed rates and payments. HELOCs have variable rates and flexible access. Choose fixed for predictable payments, variable for flexibility.
Your home is collateral for the loan. Failure to repay could result in foreclosure. Only borrow what you can comfortably afford and have a solid repayment plan.
| Use Case | Recommendation |
|---|---|
| Home improvements that add value | ✓ Excellent use — may be tax deductible |
| Debt consolidation at lower rate | ✓ Good — if you can avoid new debt |
| Education expenses | ✓ Good — investment in future |
| Vacation or luxury purchases | ⚠ Risky — using home as collateral |
| Emergency fund replacement | ⚠ Risky — consider HELOC instead |
| Investment property down payment | ⚠ High risk — leveraging home equity |
A home equity loan allows you to borrow against the equity you've built in your home. Unlike a mortgage, which is used to purchase a home, a home equity loan provides a lump sum of cash that you can use for any purpose. The loan is secured by your home, which means you risk foreclosure if you can't repay.
| Feature | Home Equity Loan | HELOC |
|---|---|---|
| Interest Rate | Fixed | Variable |
| Payment | Fixed monthly payment | Interest-only or minimum |
| Access to Funds | Lump sum at closing | Draw as needed |
| Best For | One-time large expense | Ongoing or uncertain costs |
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A homeowner in Texas with a $400,000 home and $250,000 mortgage balance qualifies for a $70,000 home equity loan at 7.8% for 15 years.
Monthly payment
Total interest: $50,060 over 15 years. Used for kitchen renovation, may qualify for tax deduction.