Home Equity Loan Calculator

Use this calculator to estimate available home equity and the monthly payment on a desired home equity loan. It helps you understand how home value, mortgage balance, and loan-to-value limits affect borrowing capacity.

What this calculator does

The home equity loan calculator estimates equity and borrowing room.

It uses:

• home value
• current mortgage balance
• maximum LTV percentage
• desired loan amount

The result shows current equity, available equity, and estimated payment on the desired loan amount.

How to use the home equity loan calculator

Enter your home value, current mortgage balance, maximum loan-to-value percentage, desired loan amount, interest rate, and term. The calculator estimates maximum borrowing based on the LTV limit.

For broader property debt analysis, use the Loan-to-Value Calculator.

Home Equity Loan Formula

Current equity = home value - current mortgage balance

Maximum borrowing = home value x max LTV - current mortgage balance

Example calculation

If:

• Home value = 500,000
• Mortgage balance = 300,000
• Max LTV = 80%
• Maximum debt allowed = 400,000

Then:

Available equity = 500,000 x 80% - 300,000 = 100,000

The estimated available equity is 100,000.

What is a home equity loan?

A home equity loan lets a homeowner borrow against the equity in a property. It is often repaid in fixed instalments and secured by the home.

Because the home is collateral, repayment risk should be considered carefully.

Interpreting your result

Available equity is not the same as approval. Lenders may also review income, credit, property type, and affordability.

When to use this calculator

Use this calculator when you want to:

• estimate home equity
• test LTV limits
• plan renovation borrowing
• compare secured debt

Common mistakes

Common mistakes include:

• overestimating home value
• ignoring lender limits
• borrowing without repayment plan
• treating equity as cash

FAQs

Is home equity the same as available borrowing?

No. Available borrowing depends on lender LTV limits and mortgage balance.

Can available equity be zero?

Yes, if the current mortgage balance is too high under the LTV limit.

Does this include closing costs?

No. Add fees separately when comparing offers.

Is this financial advice?

No. It is for planning purposes only.