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Home Equity Loan Calculator

Calculate your borrowing power and estimated monthly payments

5 Years 10 Years 15 Years 20 Years 30 Years
Total Home Equity
$0
Max Potential Loan
$0
Est. Monthly Payment
$0
New CLTV Ratio
0%

Understanding Your Home Equity Loan Calculation

A home equity loan, often referred to as a "second mortgage," allows you to borrow against the value of your home. The amount you can borrow is primarily determined by your Loan-to-Value (LTV) ratio and the amount of equity you have already built through mortgage payments and home appreciation.

How the Home Equity Calculation Works

Lenders typically allow you to borrow up to 80% or 85% of your home's total appraised value, combined across all mortgages. The formula our calculator uses is:

Maximum Loan = (Home Value × Max LTV %) – Current Mortgage Balance

Key Terms Defined

  • Market Value: What your home would likely sell for in today's real estate market.
  • Equity: The difference between your home's value and how much you owe the bank.
  • CLTV (Combined Loan-to-Value): The total of all your mortgage debts divided by the home's value. Lenders look for a CLTV below 85% for most home equity products.
  • Amortization: The process of paying off your debt over time in regular installments.

Example Calculation

Imagine your home is worth $400,000 and you owe $200,000 on your primary mortgage. If a lender allows an 85% LTV:

  1. 85% of $400,000 = $340,000 (Maximum total debt allowed)
  2. $340,000 – $200,000 (Existing debt) = $140,000 (Max Home Equity Loan amount)
Note: While this calculator provides an estimate, final loan approval depends on your credit score, debt-to-income (DTI) ratio, and a professional home appraisal.
function calculateHomeEquity() { var homeVal = parseFloat(document.getElementById('homeValue').value); var balance = parseFloat(document.getElementById('mortgageBalance').value); var ltvCap = parseFloat(document.getElementById('ltvLimit').value); var requestedLoan = parseFloat(document.getElementById('loanAmount').value); var rate = parseFloat(document.getElementById('interestRate').value); var years = parseInt(document.getElementById('loanTerm').value); if (isNaN(homeVal) || isNaN(balance) || isNaN(requestedLoan) || homeVal <= 0) { alert("Please enter valid positive numbers for home value and balance."); return; } // Calculation Logic var totalEquity = homeVal – balance; var maxTotalDebt = homeVal * (ltvCap / 100); var maxBorrowable = maxTotalDebt – balance; if (maxBorrowable 0) { monthlyPayment = requestedLoan * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1); } else { monthlyPayment = requestedLoan / numPayments; } // New CLTV Calculation var newCLTV = ((balance + requestedLoan) / homeVal) * 100; // Display Results document.getElementById('resultsArea').style.display = 'block'; document.getElementById('totalEquity').innerText = '$' + totalEquity.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('maxLoan').innerText = '$' + maxBorrowable.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('monthlyPayment').innerText = '$' + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('newCLTV').innerText = newCLTV.toFixed(1) + '%'; // Warning Messages var warning = document.getElementById('warningMsg'); if (requestedLoan > maxBorrowable) { warning.style.display = 'block'; warning.innerText = "Warning: Your requested loan exceeds the " + ltvCap + "% LTV limit. Most lenders may decline this amount."; } else if (newCLTV > 85) { warning.style.display = 'block'; warning.innerText = "Warning: A CLTV over 85% makes it significantly harder to secure a home equity loan."; } else { warning.style.display = 'none'; } // Scroll to results on mobile if(window.innerWidth < 600) { document.getElementById('resultsArea').scrollIntoView({behavior: 'smooth'}); } }

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