Home Equity Loan Calculator — True Borrowing Limit, Payment & 3-Way Comparison 2026
Your home has appreciated $140,000 since you bought it. You want to borrow $80,000 for a kitchen renovation. The lender website shows a calculator that lets you enter any loan amount — no mention of your mortgage balance, no CLTV check, no indication whether you actually qualify. You fill in $80,000 and get a payment. The problem: with your current mortgage balance, $80,000 exceeds the 80% CLTV limit. You won’t qualify.
This calculator does it correctly. Enter your home value and mortgage balance first — it calculates your actual equity, applies the 80% CLTV cap, and shows your maximum borrowable amount before you enter a loan figure. Then it compares a home equity loan against a HELOC and cash-out refinance side by side, checks your tax deductibility based on loan purpose, and runs a DTI qualification check against your income and existing debts.
Home Equity Loan Calculator
2026 Rates · Max Equity · HEL vs HELOC vs Refi · DTI Check · Tax Verdict
Enter home value & mortgage balance to see your max borrowing limit
Enter your home value and mortgage balance to instantly see your maximum borrowing power, monthly payment, 3-way comparison, tax verdict, and DTI qualification check.
What This Home Equity Loan Calculator Shows
Home Equity and Maximum Borrowing Amount (CLTV Auto-Cap)
Enter your home value and current mortgage balance. The tool instantly calculates your current equity, applies the 80% combined loan-to-value (CLTV) limit, and shows your maximum borrowable amount. If you request more than your CLTV allows, the loan amount field auto-caps with a warning — so you don’t build a payment plan around an amount you can’t actually borrow.
Home Equity Loan Payment Calculator — Monthly Payment by Term
Select your loan term — 5, 10, 15, or 20 years — and the tool shows your fixed monthly payment at the rate auto-filled for your credit score tier. Unlike HELOC or cash-out refi payments, your home equity loan payment is fixed for the entire term. Enter your credit score and the rate field updates to a realistic 2026 market rate for that tier.
HEL vs HELOC vs Cash-Out Refi — 3-Way Comparison Table
The comparison table shows all three options side by side: rate, monthly payment, total interest, closing costs, and “best for” use case. Most home equity loan calculators — including Bankrate’s and NerdWallet’s — show only the HEL payment. This tool shows the full tradeoff so you can choose the right product, not just calculate one product’s payment.
Tax Deductibility Check by Loan Purpose
Select your loan purpose — Home Improvement, Debt Consolidation, Education, or Other. Based on post-2017 Tax Cuts and Jobs Act rules, the tool flags whether your interest is likely deductible. Home improvement qualifies (up to $750,000 combined mortgage debt). Debt consolidation does not. This is purpose-specific — not a generic “may be deductible” disclaimer.
DTI Qualification Check
Enter your gross monthly income and existing monthly debts (excluding your mortgage). The tool calculates your projected debt-to-income ratio with the new home equity loan payment included and checks it against the standard 43% DTI threshold most lenders require. Green means you likely qualify. Yellow means you’re borderline and should shop credit unions specifically.
Home Equity Loan Payment Calculator — Monthly Payment Across All Terms
What Drives Your Home Equity Loan Monthly Payment
Your home equity loan payment is determined by three fixed variables: loan amount, interest rate, and term. Unlike a HELOC, the rate doesn’t change — what you lock at closing is what you pay for the life of the loan. This makes a home equity loan a home equity loan monthly payment calculator that produces a truly fixed result, not an estimate that shifts with Prime Rate.
10-Year Home Equity Loan Payment Calculator
The 10-year term is the most common for home equity loans — it balances monthly affordability with total interest. On $80,000 at 7.75%:
Monthly payment: $960. Total interest: $35,238. Total cost: $115,238. Payoff date: 10 years from funding.
15-Year Home Equity Loan Payment Calculator
The 15-year term reduces monthly payment by approximately $270 versus the 10-year, at the cost of $18,000+ in additional total interest. On $80,000 at 7.75%:
Monthly payment: $753. Total interest: $55,618. Total cost: $135,618.
20-Year Home Equity Loan Payment Calculator
The 20-year term produces the lowest monthly payment but the highest total cost. Best used when the monthly payment on a 10 or 15-year loan would push your DTI above 43%. On $80,000 at 7.75%:
Monthly payment: $656. Total interest: $77,443. Total cost: $157,443.
The tool shows all four terms simultaneously so you can see the interest-vs-payment tradeoff without running separate calculations.
Home Equity Loan Rates Calculator — 2026 Rate Tiers by Credit Score
What Is a Good Home Equity Loan Rate in 2026?
A good home equity loan rate in 2026 is anything below 7.60% — the national average as of early 2026 based on Bankrate’s weekly lender survey. Rates for excellent credit borrowers (760+) start at 6.50%–7.25%. Rates for good credit (680–719) average 7.75%–8.50%. Below 620, approval is difficult and rates above 9.5% make a home equity loan rarely cost-effective.
Credit Score Rate Tiers — 2026 Home Equity Loan Rates
760+ (Excellent Credit)
Rate range: 6.50%–7.25%. Best rates available from credit unions and regional banks. At this tier, a home equity loan often beats a personal loan on rate by 2–4 percentage points for the same amount. Total interest on $80,000 at 7.0% over 10 years: $26,680.
720–759 (Very Good Credit)
Rate range: 7.25%–7.75%. Solid qualification at most lenders. The tool auto-fills 7.75% for this tier — the realistic market midpoint for 2026. Total interest on $80,000 at 7.75% over 10 years: $35,238.
680–719 (Good Credit)
Rate range: 7.75%–8.50%. You qualify for most home equity loan programs. Rate shopping between 3+ lenders can save 0.5%–0.75% at this tier — equivalent to $3,800–$5,700 on an $80,000, 10-year loan. Total interest at 8.25%: $39,820.
620–679 (Fair Credit)
Rate range: 8.50%–9.50%. Approval is possible but rates are approaching personal loan territory. At 9.0% on $80,000 over 10 years, total interest: $45,050. Compare this against alternatives before committing — your rate may not justify using your home as collateral.
Below 620
Most conventional home equity loan lenders won’t approve below 620. FHA-backed options may be available through specific programs but are uncommon. If your score is below 620, focus on score-building (reducing card utilization to below 30%, resolving derogatory marks) for 6–12 months before applying.
HEL vs HELOC vs Cash-Out Refinance — What No Competitor Calculator Shows
Why the Choice Between These Three Products Matters More Than the Payment
Most homeowners shopping for a home equity loan are actually choosing between three different products without realizing it. A home equity loan calculator that only shows HEL payment gives you one-third of the information you need.
Home Equity Loan (HEL) — Fixed Lump Sum
Rate: Fixed. Term: 5–20 years. Monthly payment: Identical every month. Closing costs: Moderate ($500–$2,000 for most lenders). Best for: One-time large expenses (renovation, debt payoff, tuition) where payment certainty matters. Your existing mortgage stays in place — you add a second lien at the new fixed rate.
HELOC — Flexible Line of Credit
Rate: Variable, tied to Prime Rate. Currently averaging ~7.25% in April 2026. Monthly payment during draw period: Interest-only on what you’ve drawn. Total interest: Higher than HEL if you carry a balance long-term because variable rates can rise. Closing costs: Low ($0–$500 at most credit unions). Best for: Ongoing expenses (home renovation phases, business expenses) where you want to draw only what you need. Risk: Rate can rise significantly if Prime increases.
Cash-Out Refinance — Replaces Your Entire Mortgage
Rate: Current 30-year fixed rate, approximately 6.75% in April 2026. Monthly payment: New, higher payment on your full mortgage balance plus the equity you extract. Total interest: Potentially the highest of all three options — you’re restarting a 30-year amortization on your full balance. Closing costs: 3%–6% of the new loan amount — on a $400,000 refinance, that’s $12,000–$24,000 upfront. Best for: Borrowers whose current mortgage rate is above today’s rate (rare given 2020–2022 lock-ins at 3%–4%). If your mortgage rate is below 6.75%, cash-out refinance almost never makes sense — you’d raise your rate on your entire balance just to access equity.
When HEL Beats HELOC
Choose a home equity loan over a HELOC when: you need a fixed payment for budgeting, interest rates are rising and you want rate certainty, or you need the full amount upfront and won’t need to draw incrementally. The 3-way comparison table shows total interest for all three options at your entered loan amount.
Home Equity Loan vs Cash-Out Refinance Calculator — The Key Decision
If your current mortgage rate is below 6%: keep it. Use a home equity loan or HELOC instead. Cash-out refinance means resetting your entire mortgage to 6.75%+ — raising the rate on $300,000–$500,000 to access $80,000. The math almost never works unless your existing rate is above current market rates. The comparison table uses your entered current mortgage rate to show whether cash-out refi saves or costs you versus a standalone HEL.
Tax Deductibility — What the Post-2017 Law Actually Says
The Most Misunderstood Rule in Home Equity Borrowing
Most homeowners believe home equity loan interest is always tax deductible. It isn’t — and most calculators either get this wrong or display a generic disclaimer. The tool shows purpose-specific deductibility status based on IRS rules under the Tax Cuts and Jobs Act of 2017 (still in effect in 2026).
What Qualifies for the Deduction
Interest on a home equity loan is deductible if and only if the loan proceeds are used to “buy, build, or substantially improve” the home that secures the loan. This is called acquisition indebtedness.
Qualifying Uses (Interest Likely Deductible)
Home improvement — kitchen remodel, roof replacement, room addition, HVAC, structural repairs. The improvement must be to the property securing the loan (your primary or secondary home). Combined mortgage debt (original mortgage + home equity loan) must be under $750,000 ($375,000 if married filing separately).
Non-Qualifying Uses (Interest NOT Deductible)
Debt consolidation — paying off credit cards, personal loans, auto loans. Education expenses — tuition, books, student loan payoff. Medical expenses. Vacations or discretionary spending. Investment purchases. The IRS doesn’t care what loan type you used — it cares what you did with the money. A cash-out refinance used for debt consolidation is equally non-deductible.
Why This Matters for Your Real Cost
On an $80,000 home equity loan at 7.75% over 10 years, total interest paid: $35,238. If this interest is deductible and you’re in the 22% federal tax bracket, the after-tax interest cost is approximately $27,486 — a $7,752 difference. Deductibility meaningfully changes the effective cost, which is why the tool’s purpose-based flag is a functional output, not boilerplate.
CLTV — Your Real Borrowing Limit
What Is Combined Loan-to-Value (CLTV)?
CLTV = (Current Mortgage Balance + New Home Equity Loan) ÷ Home Value. Most lenders cap CLTV at 80%, meaning your total debt against the property cannot exceed 80% of its current market value.
How to Calculate How Much You Can Borrow
Maximum borrowable amount = (Home Value × 0.80) − Current Mortgage Balance.
Example: Home value $450,000. Current mortgage: $280,000. Max CLTV borrowing = ($450,000 × 0.80) − $280,000 = $360,000 − $280,000 = $80,000.
If you request $100,000 on this home, you exceed the 80% CLTV limit. The tool auto-caps your loan amount at $80,000 and shows the CLTV bar at 100% of the limit — so you know immediately, before building a payment plan around an ineligible amount.
When Lenders Allow Higher CLTV
Some lenders — particularly credit unions and specialty lenders — allow CLTV up to 85% or 90% for borrowers with 720+ credit scores. The tool defaults to 80% (the standard lender cap) but notes that higher CLTVs are possible with excellent credit. Lenders allowing 85–90% CLTV typically charge higher rates to offset the reduced equity cushion.
Home Equity Loan Amortization Calculator — How Your Balance Drops
How Home Equity Loan Interest Is Calculated
Home equity loan interest is calculated monthly on the outstanding balance. Monthly interest = (Balance × Annual Rate) ÷ 12. On an $80,000 loan at 7.75%: first month interest = ($80,000 × 0.0775) ÷ 12 = $516.67. Your $960 payment covers $516.67 in interest and $443.33 in principal. As the balance decreases each month, the interest component falls and more goes to principal — identical amortization to a mortgage.
Early Payoff — Home Equity Loan Payoff Calculator
Most home equity loans carry no prepayment penalty (verify with your lender). This tool also functions as a home equity loan repayment calculator — making extra payments reduces your balance faster, lowering interest accrual on subsequent months. On $80,000 at 7.75% over 10 years: adding $100/month extra saves approximately $3,200 in interest and pays off 13 months early. Adding $200/month saves approximately $5,700 and pays off 23 months early.
Real Home Equity Loan Scenarios With Actual Numbers
Scenario 1: Home Improvement — Kitchen Renovation, Deductible Interest
Sarah owns a $520,000 home with a $310,000 mortgage balance (3.25% rate from 2021). She needs $75,000 for a full kitchen renovation and primary bath remodel.
Max borrowable (80% CLTV): ($520,000 × 0.80) − $310,000 = $106,000. She qualifies.
HEL at 7.75%, 10 years: $899/month. Total interest: $33,062. With 22% tax bracket deduction: effective interest cost = $25,788.
Cash-out refi at 6.75%, 30 years on $385,000: $2,496/month. Closing costs: ~$7,700. Rate on her existing $310,000 jumps from 3.25% to 6.75%.
Verdict: HEL wins decisively. She preserves her 3.25% rate on $310,000. Cash-out refi would cost an additional $47,000+ in interest over the mortgage life by repricing her existing balance.
Scenario 2: Debt Consolidation — Interest Not Deductible
Marcus owns a $380,000 home with a $220,000 mortgage balance. He has $52,000 in credit card debt at an average 22.5% APR.
Max borrowable (80% CLTV): ($380,000 × 0.80) − $220,000 = $84,000. He qualifies.
HEL at 8.25%, 10 years, $52,000 loan: $640/month. Total interest: $24,810. Versus continuing credit card minimum payments: estimated total interest $48,000+ over 8+ years at 22.5%.
Tax deductibility: NOT deductible (debt consolidation purpose). Tool shows red flag.
Verdict: HEL still saves $23,000+ in interest versus credit cards — even without the tax deduction. But Marcus must commit to not rebuilding card balances after payoff.
Scenario 3: The Cash-Out Refi Trap
Jennifer has a $600,000 home with a $350,000 mortgage at 7.5% (financed in 2023). She wants $90,000 for an addition. Her broker suggests a cash-out refi.
Cash-out refi: New loan $440,000 at 6.75%, 30 years. Monthly: $2,852. Closing costs: $13,200.
HEL at 7.75%, 15 years on $90,000: existing mortgage payment + $839 HEL = combined payment $3,300/month. Total interest on $90K HEL: $60,975. But she keeps her 7.5% rate on $350,000 — the cash-out refi at 6.75% only saves 0.75% on her existing balance.
Net impact of cash-out refi: saves ~$1,125/year on existing $350K balance (0.75% × $350K / rate savings) but costs $13,200 upfront. Break-even: 11.7 years. She plans to sell in 5 years.
Verdict: HEL wins. Cash-out refi break-even exceeds her planned ownership horizon.
Should I Get a Home Equity Loan? — Decision Framework
Get a Home Equity Loan If:
You need a lump sum for a specific one-time expense. You want a fixed rate and predictable payment for the entire term. Your current mortgage rate is below 6.5% — preserve it. Your purpose qualifies for the tax deduction (home improvement). Your CLTV is below 80% with the new loan included. Your DTI stays under 43% after the new payment.
Consider a HELOC Instead If:
You need funds in stages over time (renovation phases, business expenses). You expect to repay within 3–5 years and want to avoid locking into a longer fixed term. Your purpose doesn’t qualify for the tax deduction (HELOC and HEL have identical tax treatment — purpose is what matters, not product type).
Consider Cash-Out Refinance Only If:
Your current mortgage rate is higher than today’s rate (~6.75%). You’re rolling in enough cash-out to justify closing costs (typically $10,000–$20,000). You’re extending your payoff date intentionally as part of a financial restructuring. This is a rare case in 2026 — most homeowners locked rates below 6% in 2020–2022.
Frequently Asked Questions
What is a home equity loan calculator?
A home equity loan calculator estimates your monthly payment, total interest, payoff date, and maximum borrowing limit based on your home value, mortgage balance, interest rate, and loan term. A complete calculator also checks your CLTV limit, compares against HELOC and cash-out refinance options, and flags tax deductibility based on your loan purpose.
How much can I borrow with a home equity loan?
Most lenders allow you to borrow up to 80% of your home’s value minus your current mortgage balance. Formula: (Home Value × 0.80) − Mortgage Balance = Maximum Home Equity Loan. On a $450,000 home with a $280,000 mortgage, maximum borrowable = $80,000. Some lenders allow 85%–90% CLTV for borrowers with 720+ credit scores.
What is the current home equity loan rate in 2026?
The average home equity loan rate is approximately 7.60% as of early 2026, based on Bankrate’s weekly lender survey. Rates range from 6.50%–7.25% for excellent credit (760+) to 8.50%–9.50% for fair credit (620–679). Credit unions typically offer rates 0.25%–0.50% below national banks for equivalent credit profiles.
Is home equity loan interest tax deductible in 2026?
Home equity loan interest is tax deductible only if the loan proceeds are used to buy, build, or substantially improve the home securing the loan. Interest on funds used for debt consolidation, education, or other non-home expenses is not deductible under the Tax Cuts and Jobs Act of 2017 (still in effect in 2026). The combined mortgage debt must also be under $750,000.
What credit score do I need for a home equity loan?
Most lenders require a minimum credit score of 620 for a home equity loan, with 680+ strongly preferred. For the best rates (below 7.5%), you typically need 720+. Below 620, options are limited and rates often exceed the cost benefit of using home equity. Some lenders require 680 minimum with a maximum CLTV of 80%, 700 for 85% CLTV, and 740 for 90% CLTV.
What is the difference between a home equity loan and a HELOC?
A home equity loan provides a lump sum at a fixed rate — your payment is identical every month for the full term. A HELOC is a revolving line of credit at a variable rate — you draw what you need during the draw period and pay interest only on what you’ve borrowed. HELs offer payment certainty. HELOCs offer flexibility. Both are second mortgages secured by your home.
How long does it take to get a home equity loan?
Home equity loan approval and funding typically takes 2–6 weeks from application. The process includes appraisal (1–2 weeks), underwriting (1–2 weeks), and a mandatory 3-day right of rescission after closing. Some lenders offer expedited processing at 10–14 days for existing customers with automated valuation models (no full appraisal required).
Does a home equity loan affect my existing mortgage?
No. A home equity loan is a separate second mortgage — it has no impact on your existing first mortgage rate, term, or payment. You’ll have two separate monthly payments: your original mortgage and the new home equity loan. Your existing mortgage retains its priority lien position.
Data Sources
Accuracy & Verification
Home equity loan rate averages (7.60%) sourced from Bankrate’s weekly national lender survey, February 2026. Rate tiers by credit score based on The Mortgage Reports analysis of lender quotes, March 2026. CLTV limits reflect standard Fannie Mae and lender guidelines. Tax deductibility rules sourced from IRS Publication 936 and the Tax Cuts and Jobs Act of 2017. DTI threshold (43%) reflects standard CFPB Qualified Mortgage guidelines. Last verified: April 2026.
This tool provides estimates for informational purposes only. Results do not constitute financial, tax, or legal advice. Home equity loan rates, CLTV limits, and approval depend on your lender, credit profile, property value, and market conditions. Consult a qualified lender and tax advisor before making any equity borrowing decision.
Related Calculators
Tools That Work Alongside This One
If you’re comparing a home equity loan against tapping a revolving credit line, the HELOC calculator shows your draw limit, interest-only payment during the draw period, and repayment phase cost. For homeowners evaluating whether a cash-out refinance makes more sense, the mortgage calculator models your new combined payment. And if the loan purpose is debt consolidation, the debt consolidation calculator compares a home equity loan against personal loan and balance transfer options on total cost.