Estimate your borrowable equity and monthly payments
5 Years
10 Years
15 Years
20 Years
30 Years
Total Equity Available:$0.00
Maximum Borrowing Power (at LTV cap):$0.00
Monthly Home Equity Payment:$0.00
New Total Combined LTV:0.00%
Understanding Home Equity Loans
A home equity loan, often referred to as a "second mortgage," allows you to borrow against the value of your home. Unlike a Home Equity Line of Credit (HELOC), a home equity loan typically provides a lump sum with a fixed interest rate and a fixed repayment schedule.
How the Calculation Works
Lenders generally limit the amount you can borrow based on your Loan-to-Value (LTV) ratio. Most lenders require you to keep at least 15% to 20% equity in your home after the loan is issued.
The Formula: (Home Value × Max LTV %) - Current Mortgage Balance = Maximum Borrowable Amount
Practical Example
If your home is worth $400,000 and your lender allows an 80% LTV, the total combined debt allowed is $320,000. If you currently owe $200,000 on your primary mortgage, you could potentially qualify for a home equity loan of up to $120,000.
Pro Tip: Your credit score significantly impacts your interest rate. While you might have the equity, a lower credit score could reduce the LTV limit a lender is willing to offer.
function calculateEquity() {
var homeValue = parseFloat(document.getElementById("homeValue").value);
var mortgageBalance = parseFloat(document.getElementById("mortgageBalance").value);
var ltvLimit = parseFloat(document.getElementById("ltvLimit").value) / 100;
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var annualRate = parseFloat(document.getElementById("interestRate").value) / 100;
var borrowAmount = parseFloat(document.getElementById("borrowAmount").value);
var errorDiv = document.getElementById("errorWarning");
errorDiv.style.display = "none";
if (isNaN(homeValue) || isNaN(mortgageBalance) || isNaN(borrowAmount) || homeValue <= 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
// Calculations
var rawEquity = homeValue – mortgageBalance;
var maxTotalDebt = homeValue * ltvLimit;
var maxBorrowable = maxTotalDebt – mortgageBalance;
if (maxBorrowable 0) {
if (annualRate === 0) {
monthlyPayment = borrowAmount / numberOfPayments;
} else {
monthlyPayment = borrowAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
}
var combinedLTV = ((mortgageBalance + borrowAmount) / homeValue) * 100;
// Display Results
document.getElementById("resultsArea").style.display = "block";
document.getElementById("totalEquity").innerText = "$" + rawEquity.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("maxBorrow").innerText = "$" + maxBorrowable.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("monthlyPayment").innerText = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("newCombinedLTV").innerText = combinedLTV.toFixed(2) + "%";
// Warnings
if (borrowAmount > maxBorrowable) {
errorDiv.innerText = "Warning: Your requested loan amount exceeds the selected LTV limit of " + (ltvLimit * 100) + "%.";
errorDiv.style.display = "block";
}
}