Equity is value minus what you owe
Your home equity is the slice of your home you actually own: its current market value minus the mortgage balance still owed. Lenders will let you borrow against part of that slice — most cap the combined loan-to-value (CLTV) at about 80% of the home's value, meaning your existing mortgage plus any new home equity loan or HELOC together cannot exceed that ceiling. This calculator shows your equity, the most you could borrow under your chosen LTV limit, and the monthly payment on the amount you actually want.
With a $500,000 home, an 80% limit allows $400,000 of total mortgage debt. If you already owe $300,000, the room left for a home equity loan or HELOC is $100,000 — even though your equity is $200,000. The other 20% stays as the lender's safety cushion.
Home equity loan vs HELOC
A home equity loan pays out a lump sum at a fixed rate with a fixed payment — the payment this calculator estimates. A HELOC is a revolving credit line, usually at a variable rate: you draw what you need during a draw period (often interest-only), then repay over a set term. HELOC payments move with rates and with how much you have drawn, so treat any HELOC estimate as a snapshot, not a promise. Both are secured by your home — missed payments put the property at risk, which is why their rates beat unsecured loans.
Worked example
A $500,000 home with a $300,000 balance holds $200,000 of equity and a current LTV of 60%. At an 80% limit the maximum new borrowing is $100,000. Borrow $50,000 of it at 8.5% over 15 years and the payment is about $492.37 a month, with roughly $38,600 of interest over the full term if nothing extra is paid.
How to use this calculator
- Enter your home's current value — a recent appraisal or a realistic market estimate.
- Enter your current mortgage balance from your latest statement.
- Leave the LTV limit at 80%, or adjust it to your lender's actual cap (some go to 85–90%, at higher rates).
- Enter the amount you want to borrow, a rate and a term to see the payment.
- Compare against the Loan Calculator for an unsecured alternative before putting your home on the line.
Borrow against a roof carefully
Home equity credit is cheap because the collateral is your house. It suits value-adding projects — renovations that raise the home's value, or consolidating genuinely expensive debt with a plan to stay consolidated. It is a poor fit for spending that leaves nothing behind. And because the limit is a percentage of today's value, a falling market can shrink a HELOC or freeze it entirely — borrow with a margin below the maximum this page shows.