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Before applying for a home equity loan, it helps to know roughly how much you could borrow and what the monthly payment would look like.
This calculator estimates your available equity using a maximum combined loan-to-value ratio, then finds the monthly payment for that amount.
How it works
Enter your home's current value, your existing mortgage balance, and optionally the maximum combined loan-to-value percentage lenders typically allow (85% by default). The calculator finds your available equity, then applies the loan amortization formula using your chosen rate and term.
- Enter home value ($).
- Enter current mortgage balance ($).
- Enter max combined loan-to-value (%).
- Enter annual interest rate (%).
- Enter loan term (years).
- Click Calculate to see your results.
Examples
$400,000 home, $200,000 owed
A $400,000 home with a $200,000 mortgage balance and an 85% max CLTV has about $140,000 in available equity, giving a monthly payment of roughly $1,699 at 8% over 10 years.
Who should use it
- Estimating available borrowing power before applying for a home equity loan.
- Planning a home renovation or debt consolidation funded by home equity.
Industry applications
- Mortgage lending and loan origination
- Personal and home improvement financing
Advantages
- Combines the equity calculation and the loan payment estimate in one step.
- Lets you adjust the CLTV assumption to match different lenders.
Limitations
- Doesn't account for closing costs or fees that may apply to a home equity loan.
Common mistakes to avoid
- Assuming approved equity will exactly match the estimate without accounting for lender-specific CLTV limits and appraisal differences.
- Confusing a home equity loan (lump sum, fixed payment) with a HELOC (revolving credit line).
Best practices
- Use a conservative CLTV estimate and compare quotes from multiple lenders, since maximum CLTV varies by lender and loan program.
Tips
- Get a current home valuation (recent comparable sales or a professional appraisal) rather than relying on an outdated estimate, since it directly drives your available equity.