Home Equity Loan Calculator
Estimate your borrowing power and monthly payments
Summary Results
Max Estimated Loan Amount
$80,000
Monthly Payment (Requested)
$593.51
Total Equity in Home:
$170,000
Remaining Post-Loan LTV:
73.3%
Total Interest Paid:
$21,221
Alert: Requested amount exceeds the lender's LTV limit.
How Home Equity Loan Calculations Work
A home equity loan, often referred to as a "second mortgage," allows homeowners to borrow against the value of their property. Unlike a Home Equity Line of Credit (HELOC), a home equity loan provides a lump sum with a fixed interest rate and a predictable monthly payment.
The Combined Loan-to-Value (CLTV) Ratio
Lenders determine how much you can borrow using the CLTV ratio. The formula is:
(Current Mortgage + Desired Loan) รท Appraisal Value = CLTV%.
Most traditional lenders require your CLTV to stay below 80% to 85%. For example, if your home is worth $400,000, an 80% LTV limit means your total debt (existing mortgage + new loan) cannot exceed $320,000.
Home Equity Loan Example
- Home Value: $500,000
- Current Mortgage Balance: $300,000
- Max LTV (85%): $425,000
- Borrowing Potential: $125,000 ($425k – $300k)
Why Use a Home Equity Loan?
Because these loans are secured by your property, interest rates are typically much lower than credit cards or personal loans. Common uses include high-ROI home renovations, debt consolidation, or covering significant education expenses. However, remember that your home serves as collateral; failure to repay can lead to foreclosure.
function calculateEquity() {
// Get input values
var homeValue = parseFloat(document.getElementById("homeValue").value) || 0;
var mortgageBalance = parseFloat(document.getElementById("mortgageBalance").value) || 0;
var ltvLimit = parseFloat(document.getElementById("ltvLimit").value) / 100;
var requestAmount = parseFloat(document.getElementById("requestAmount").value) || 0;
var interestRate = parseFloat(document.getElementById("interestRate").value) / 100 / 12;
var loanTerm = parseInt(document.getElementById("loanTerm").value) * 12;
// Basic Equity Math
var totalEquity = homeValue – mortgageBalance;
var maxBorrowingCapacity = (homeValue * ltvLimit) – mortgageBalance;
if (maxBorrowingCapacity 0 && interestRate > 0) {
var x = Math.pow(1 + interestRate, loanTerm);
monthlyPayment = (requestAmount * x * interestRate) / (x – 1);
totalPaid = monthlyPayment * loanTerm;
totalInterest = totalPaid – requestAmount;
} else if (requestAmount > 0 && interestRate === 0) {
monthlyPayment = requestAmount / loanTerm;
totalInterest = 0;
}
// Post-Loan LTV
var finalDebt = mortgageBalance + requestAmount;
var postLtvPercent = (finalDebt / homeValue) * 100;
// Formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
});
var monthlyFormatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD'
});
// Update UI
document.getElementById("maxLoanDisplay").innerText = formatter.format(maxBorrowingCapacity);
document.getElementById("monthlyPaymentDisplay").innerText = monthlyFormatter.format(monthlyPayment);
document.getElementById("totalEquity").innerText = formatter.format(totalEquity);
document.getElementById("postLtv").innerText = postLtvPercent.toFixed(1) + "%";
document.getElementById("totalInterest").innerText = monthlyFormatter.format(totalInterest);
// Warning Check
var warningBox = document.getElementById("warning-box");
if (requestAmount > maxBorrowingCapacity) {
warningBox.style.display = "block";
document.getElementById("monthlyPaymentDisplay").style.color = "#e74c3c";
} else {
warningBox.style.display = "none";
document.getElementById("monthlyPaymentDisplay").style.color = "#27ae60";
}
}
// Run calculation once on load
window.onload = calculateEquity;