Estimate the cost of a home equity loan (a lump-sum second mortgage). Enter the amount, rate, and term for the monthly payment, total interest, and a year-by-year schedule. Open Closing costs to fold in origination and other fees — the calculator then reports cash received, total cost, and APR. The How much tab sizes the loan from your home's value, remaining mortgage, and lender LTV.
Default example ($150,000 at 8%)
| Result | Amount |
|---|---|
| Monthly pay | $1,433.48 |
| Total of 180 loan payments | $258,026.06 |
| Total interest | $108,026.06 |
With $7,500 closing deducted from the loan, cash received is $142,500, cost of loan is $115,526.06, and APR is 8.860%. Paying the same closing upfront hides cash received; the payment, cost, and APR stay the same.
Examples
Fixed payment on a 15-year second mortgage
A $150,000 home equity loan at 8% for 15 years. Monthly rate is 0.08 / 12. The amortizing payment is $1,433.48. Over 180 months you repay $258,026.06, of which $108,026.06 is interest. Month 1 is $1,000.00 interest and $433.48 principal.
How much can I borrow?
A home worth $600,000 with $250,000 still owed on the first mortgage, at a lender cap of 80% combined LTV: $600,000 × 80% − $250,000 = $230,000. Current LTV is 41.7%. If the remaining mortgage already uses 80% or more of the home's value, a home equity loan usually will not be approved on equity alone.
Formula
The contractual payment amortizes the face loan amount. Monthly rate r is the annual rate ÷ 12; n is years × 12:
payment = P × r / (1 − (1 + r)^(−n))
Total of payments is payment × n. Total interest is that sum minus P. Closing does not change P — a deducted $7,500 fee on a $150,000 loan still amortizes $150,000. You simply receive $142,500.
When fees are on, cost of loan is total interest + closing. APR is the
IRR of the rounded monthly payment against net proceeds (loan − closing),
annualized as 12 × monthly IRR and rounded to three decimals.
The amount you may qualify for is:
max home equity loan = round(home value × LTV − mortgage balance)
A home equity loan uses your house as collateral. Budget the full monthly payment — and compare APR across lenders — before you tap equity.
Sources and limits
- CFPB: What is a home equity loan?
- IRS Publication 936 for current home-mortgage interest deduction rules
The payment model uses a fixed rate and level monthly payments. It excludes late fees, escrow, taxes, insurance, changing property value, and lender qualification rules.
A lump sum or a credit line?
This tool models an amortizing lump-sum loan. If your borrowing has an interest-only draw period followed by repayment, use the HELOC Calculator. Its draw-period payment and later payment are separate estimates; neither calculator predicts future changes to a variable rate.