When you own a home, the equity you have built can represent a significant financial resource. A home equity loan allows homeowners to borrow against a portion of that equity while keeping their existing mortgage in place. Before applying, however, it is important to understand how much you may be able to borrow and what the resulting monthly payment could look like.

The Bankrate Home Equity Loan Calculator on this page is designed to make that process easier. It uses your current home value, mortgage balance, maximum loan-to-value (LTV) percentage, desired loan amount, interest rate, and repayment term to estimate several important figures.

The calculator shows your available home equity, maximum estimated home equity loan, estimated loan amount, monthly payment, total interest, and total loan repayment. If the amount you want to borrow exceeds the estimated borrowing limit based on your selected LTV, the calculator also alerts you and uses the estimated maximum eligible amount for its payment calculation.

This guide explains how the calculator works, the formulas behind the results, how to interpret the numbers, practical examples, important factors to consider, and common questions about home equity loans.

What Is a Home Equity Loan?

A home equity loan is a type of borrowing that uses the equity in your home as collateral. Your home equity is generally the difference between the property’s current market value and the amount you still owe on your mortgage.

For example, suppose your home is worth $400,000 and your current mortgage balance is $250,000.

Your estimated equity would be:

$400,000 − $250,000 = $150,000

This does not necessarily mean you can borrow the entire $150,000. Lenders often establish a maximum combined loan-to-value ratio, or CLTV/LTV limit, that determines how much debt can be secured by the property.

The calculator allows you to enter a maximum LTV percentage so you can estimate a borrowing limit based on that assumption.

A home equity loan is generally different from a cash-out refinance. With a home equity loan, the existing mortgage generally remains in place and the new loan is separate. A cash-out refinance replaces the existing mortgage with a new mortgage.

What Does the Bankrate Home Equity Loan Calculator Calculate?

The calculator provides several useful estimates.

Available Home Equity

This is the difference between your home’s current value and your outstanding mortgage balance.

Maximum Loan Amount

This estimates the additional home equity loan available after applying the selected maximum LTV and subtracting the existing mortgage balance.

Estimated Loan Amount

This is the amount used for the payment calculation. If your desired loan is higher than the estimated maximum, the calculator uses the maximum estimated amount instead.

Monthly Payment

This estimates the principal-and-interest payment for the selected home equity loan.

Total Interest

This estimates how much interest would be paid over the entire repayment term if the loan remains at the entered rate for the full term.

Total Loan Repayment

This combines the estimated principal and interest paid over the full term.

These results can help you compare different loan amounts, interest rates, and repayment periods.

How to Use the Bankrate Home Equity Loan Calculator

Using the calculator is straightforward. You need information about your property, existing mortgage, proposed loan, and repayment terms.

Step 1: Enter Your Current Home Value

Start by entering the current estimated market value of your home.

For example, if your home is currently worth $450,000, enter:

$450,000

Use a realistic current value rather than the price you originally paid for the property. Home values can change significantly over time.

If you are unsure about the current value, consider using a recent appraisal, comparable property sales, or another reliable property valuation source.

Step 2: Enter Your Current Mortgage Balance

Enter the amount you still owe on your existing mortgage.

For example, if your outstanding mortgage principal is $280,000, enter:

$280,000

Do not enter the original mortgage amount unless it is still your current balance.

Your mortgage statement or lender account information may provide the most accurate outstanding balance.

Step 3: Enter the Maximum LTV

Enter the maximum loan-to-value percentage you want to use for your estimate.

The calculator defaults to 80%.

For example, with an $500,000 home and an 80% LTV:

$500,000 × 80% = $400,000

That means the estimated total debt secured by the property would be capped at $400,000 under this assumption.

The existing mortgage balance is then subtracted to determine the estimated additional home equity loan amount.

Step 4: Enter the Desired Home Equity Loan

Enter how much you would like to borrow.

For example, you might want a $50,000 home equity loan.

The calculator compares your requested amount with the estimated maximum available amount.

If the requested amount is too high, the calculator uses the maximum estimated loan amount for the payment calculation and displays a warning.

Step 5: Enter the Annual Interest Rate

Enter the expected annual interest rate for the home equity loan.

For example:

8.00%

The calculator converts the annual rate into a monthly rate before calculating the payment.

Your actual offered rate may differ depending on factors such as credit profile, lender requirements, loan amount, property characteristics, and market conditions.

Step 6: Choose the Loan Term

Select the desired repayment period.

Available terms include:

• 5 years
• 10 years
• 15 years
• 20 years
• 25 years
• 30 years

The default selection is 15 years.

A shorter term generally means fewer payments and can reduce total interest, but the monthly payment can be higher. A longer term can reduce the monthly payment but may result in more interest over the life of the loan.

Step 7: Select Calculate

After entering the information, select Calculate.

The calculator displays your estimated equity, maximum loan amount, estimated loan amount, monthly payment, total interest, and total repayment.

Understanding Home Equity

Home equity is one of the most important concepts when considering a home equity loan.

The basic formula is:

Home Equity = Current Home Value − Mortgage Balance

For example:

• Home value = $500,000
• Mortgage balance = $300,000

Therefore:

$500,000 − $300,000 = $200,000

The homeowner has an estimated $200,000 in equity.

However, available equity and available borrowing capacity are not the same thing.

A lender may limit the total debt secured by the property to a particular percentage of the home’s value.

Understanding Loan-to-Value Ratio

Loan-to-value ratio compares the amount of debt secured by a property with its value.

The basic formula is:

LTV = Total Loan Balance ÷ Home Value × 100

For example, if a home is worth $400,000 and the mortgage balance is $280,000:

$280,000 ÷ $400,000 × 100 = 70%

The existing mortgage represents 70% of the property’s value.

If a lender or planning scenario uses an 80% maximum LTV, the total debt limit would be:

$400,000 × 80% = $320,000

The estimated additional borrowing capacity would therefore be:

$320,000 − $280,000 = $40,000

This is the basic calculation used by the tool to estimate the maximum home equity loan.

Home Equity Loan Formula Used by the Calculator

The calculator uses the standard fixed-rate loan payment formula.

The monthly payment is calculated using:

M = P × [r(1 + r)ⁿ] ÷ [(1 + r)ⁿ − 1]

Where:

• M = monthly payment
• P = loan principal
• r = monthly interest rate
• n = total number of monthly payments

The annual interest rate is converted to a monthly rate:

r = Annual Interest Rate ÷ 100 ÷ 12

The number of payments is:

n = Loan Term in Years × 12

For example, a 15-year loan has:

15 × 12 = 180 payments

The calculator also handles a 0% interest rate separately. In that situation, the estimated payment is simply the loan amount divided by the number of monthly payments.

How the Maximum Loan Amount Is Calculated

The calculator uses the selected maximum LTV to estimate the maximum total debt allowed by the input assumptions.

The first calculation is:

Maximum Total Debt = Home Value × Maximum LTV

Then:

Maximum Home Equity Loan = Maximum Total Debt − Existing Mortgage Balance

The calculator ensures that the result does not fall below zero.

For example:

• Home value: $500,000
• Mortgage balance: $300,000
• Maximum LTV: 80%

First:

$500,000 × 80% = $400,000

Then:

$400,000 − $300,000 = $100,000

The estimated maximum home equity loan would therefore be $100,000 under these assumptions.

How the Calculator Handles Your Desired Loan Amount

Suppose the estimated maximum loan is $100,000, but you enter a desired loan amount of $125,000.

The calculator does not use the full $125,000 for the payment calculation.

Instead, it uses:

$100,000

and displays a warning indicating that the desired amount exceeds the estimated maximum based on the selected home value, mortgage balance, and LTV.

This feature helps prevent the payment estimate from being based on a loan amount that exceeds the calculator’s estimated borrowing limit.

Practical Example: $100,000 Home Equity Loan

Consider a homeowner with the following situation:

Input	Example
Current home value	$500,000
Mortgage balance	$300,000
Maximum LTV	80%
Desired loan	$100,000
Interest rate	8%
Loan term	15 years

First, calculate available equity:

$500,000 − $300,000 = $200,000

Next, calculate maximum total debt:

$500,000 × 80% = $400,000

Then calculate the estimated maximum home equity loan:

$400,000 − $300,000 = $100,000

The requested $100,000 loan matches the estimated maximum.

At an 8% annual interest rate over 15 years, the calculator can then estimate the monthly payment and total interest using the fixed-rate loan formula.

The exact result depends on the mathematical calculation, but this example demonstrates how the property’s value, existing mortgage, LTV, interest rate, and term work together.

Practical Example: Desired Loan Exceeds the Estimated Limit

Now consider:

• Home value: $400,000
• Mortgage balance: $300,000
• Maximum LTV: 80%
• Desired loan: $50,000

The maximum total debt at 80% LTV is:

$400,000 × 80% = $320,000

The estimated maximum additional loan is:

$320,000 − $300,000 = $20,000

The homeowner wants $50,000, but the calculated maximum is only $20,000.

The calculator therefore uses the estimated $20,000 loan amount for the payment and interest calculations and displays a warning.

This is useful because it distinguishes between the amount a homeowner wants to borrow and the amount supported by the calculator’s selected LTV assumptions.

Practical Example: Comparing Loan Terms

Suppose you want to borrow $60,000 at an 8% annual interest rate.

You could compare a 10-year term with a 20-year term.

A 10-year loan generally requires a higher monthly payment because the principal must be repaid over a shorter period.

A 20-year loan spreads repayment over twice as many years, which can reduce the monthly payment.

However, the longer repayment period can result in substantially more total interest.

This is why looking only at the monthly payment can be misleading. The calculator’s monthly payment, total interest, and total repayment results should be considered together.

Factors That Affect a Home Equity Loan

Several factors can influence your potential borrowing capacity and repayment cost.

Home Value

A higher property value can increase available equity and potentially increase borrowing capacity when the mortgage balance remains unchanged.

However, the value used by a lender may differ from your personal estimate.

Mortgage Balance

A larger existing mortgage balance generally leaves less room under a maximum LTV limit.

For example, two homeowners could own homes worth $500,000, but the homeowner with a $400,000 mortgage balance would generally have less available equity than someone who owes $250,000.

Loan-to-Value Ratio

The selected maximum LTV has a direct effect on estimated borrowing capacity.

An 80% limit produces a different result than a 70% or 90% limit.

Interest Rate

The interest rate directly affects the monthly payment and total interest.

Even a relatively small rate difference can have a significant effect over a long repayment period.

Loan Term

The repayment term determines how many monthly payments are made.

Shorter terms generally mean higher monthly payments but fewer years of interest accumulation.

Longer terms generally spread payments out and may reduce the monthly payment, but the total interest can increase.

Benefits of Using a Home Equity Loan Calculator

A home equity calculator can help with financial planning in several ways.

Estimate Borrowing Capacity

You can quickly see how the property value and existing mortgage affect potential borrowing capacity.

Compare Loan Amounts

Testing different desired loan amounts can help you understand how the monthly payment changes.

Evaluate Different Terms

You can compare 5-, 10-, 15-, 20-, 25-, and 30-year repayment periods.

Estimate Total Interest

Monthly payments do not tell the entire story. Total interest provides a broader view of borrowing costs.

Plan Large Expenses

Home equity loans are sometimes considered for major expenses such as home improvements, education costs, or debt consolidation. The calculator can help estimate the loan’s repayment requirements before researching specific offers.

Home Equity Loan vs. HELOC

A home equity loan and a home equity line of credit (HELOC) both use home equity as collateral, but they work differently.

A home equity loan generally provides a lump sum that is repaid according to a set schedule.

A HELOC generally provides a revolving line of credit that can be borrowed from, repaid, and potentially borrowed again during the applicable draw period.

The calculator on this page is designed specifically around a home equity loan rather than a revolving HELOC balance.

If you are considering a HELOC, you should analyze its interest rate structure, draw period, repayment period, fees, and payment changes separately.

Home Equity Loan vs. Cash-Out Refinance

A home equity loan typically creates an additional loan while leaving the existing mortgage in place.

A cash-out refinance generally replaces the existing mortgage with a new mortgage that has a larger principal balance, with the difference made available as cash subject to applicable requirements.

The two approaches can produce very different payment structures and interest costs.

Factors such as your existing mortgage rate, proposed new mortgage rate, closing costs, remaining term, and desired cash amount can affect the comparison.

Important Things to Consider Before Borrowing

Using home equity means putting your property behind the debt. If the loan is not repaid according to its terms, there can be serious financial consequences.

Before borrowing, consider:

• Whether the monthly payment fits comfortably within your budget
• How much total interest you will pay
• Whether the expense justifies taking on additional debt
• Your existing mortgage obligations
• Potential lender fees and closing costs
• Whether the interest rate is fixed or variable
• How long you expect to remain in the property
• How the additional debt affects your overall financial situation

The calculator is a planning tool, not a guarantee of approval or loan terms.

Tips for Getting More Accurate Estimates

For better results, use realistic and current information.

Use a recent home value estimate. Property values can change, and a lender may use an appraisal or another valuation method.

Use your current mortgage balance. Avoid entering the original mortgage amount if you have already paid down the loan.

Test several LTV assumptions. This can demonstrate how borrowing capacity changes under different limits.

Compare multiple terms. A lower monthly payment does not necessarily mean lower total borrowing costs.

Use realistic interest rates. The rate you qualify for may depend on your financial and property circumstances.

Consider the total repayment. The monthly payment is only one part of the cost.

Limitations of the Calculator

The Bankrate Home Equity Loan Calculator provides estimates based on the numbers entered by the user.

Actual lenders may use additional criteria, including:

• Credit history
• Income
• Debt-to-income ratio
• Property type
• Property location
• Appraised value
• Existing liens
• Loan amount
• Lender-specific LTV or CLTV requirements
• Interest rate and market conditions
• Fees and closing costs

The calculator also does not determine whether a particular lender will approve a loan.

Its LTV calculation is an estimate based on the maximum LTV entered by the user.

Frequently Asked Questions

1. What is the Bankrate Home Equity Loan Calculator?

It is an online calculation tool that estimates available home equity, maximum borrowing capacity, monthly payment, total interest, and total repayment for a potential home equity loan.

2. How do I calculate my home equity?

Subtract your current mortgage balance from your home’s current estimated value.

Home Equity = Home Value − Mortgage Balance

3. Can I borrow all of my home equity?

Not necessarily. Lenders may impose maximum LTV or combined loan-to-value limits, and other qualification requirements may apply.

4. What does 80% LTV mean?

An 80% LTV means the total debt secured by the property is limited to 80% of the property’s value under the selected assumption.

5. Why does my maximum loan amount differ from my available equity?

Equity is the difference between your home’s value and mortgage balance. Maximum borrowing capacity depends on the applicable LTV limit, so you may not be able to borrow the full amount of your equity.

6. What is included in the monthly payment calculation?

The calculator estimates the principal-and-interest payment based on the entered loan amount, annual interest rate, and repayment term.

7. Does the calculator include property taxes and homeowners insurance?

No. Those costs are not included in the home equity loan payment calculation.

8. What happens if I enter a desired loan amount that is too high?

The calculator uses the estimated maximum loan amount based on the selected LTV and displays a warning that the requested amount exceeds the estimated limit.

9. Can I use the calculator for a 15-year home equity loan?

Yes. A 15-year term is one of the available options and is selected by default.

10. Does a longer loan term lower the monthly payment?

Generally, spreading the same principal over more payments can reduce the monthly payment, but a longer term can increase the total amount of interest paid.

11. How is total interest calculated?

The calculator multiplies the estimated monthly payment by the total number of payments and subtracts the original loan amount.

Total Interest = Total Payments − Loan Principal

12. Can I calculate a home equity loan at 0% interest?

The calculator supports a 0% interest input and calculates the payment by dividing the loan amount by the number of monthly payments.

13. Is the maximum loan amount guaranteed?

No. It is an estimate based on the home value, mortgage balance, and maximum LTV entered into the calculator. Actual lender requirements can differ.

14. Does home value affect how much I can borrow?

Yes. Under an LTV-based calculation, the property value directly affects the maximum total debt and therefore the estimated additional borrowing capacity.

15. Is this calculator an official loan approval tool?

No. It provides estimates for planning purposes. Actual loan approval, interest rates, fees, terms, and borrowing limits depend on the lender and the borrower’s circumstances.

Final Thoughts

The Bankrate Home Equity Loan Calculator provides a practical way to explore the potential costs and borrowing capacity associated with a home equity loan. By entering your home value, mortgage balance, maximum LTV, desired loan amount, interest rate, and loan term, you can estimate how much equity you have, how much you may be able to borrow under your selected assumptions, and what repayment could look like.

The most useful way to use the calculator is to test several scenarios rather than relying on one estimate. Compare different loan amounts, interest rates, and repayment terms. Pay attention not only to the monthly payment but also to total interest and total repayment.

Remember that your home’s equity is valuable, but borrowing against it creates an additional financial obligation secured by your property. Calculator results should therefore be treated as estimates for planning and comparison. Before taking out a home equity loan, review the actual terms, fees, interest rate, repayment requirements, and lender disclosures carefully.