Home Equity Loan Calculator

Introduction

This Home Equity Loan Calculator estimates the monthly payment on a fixed-rate second mortgage, also called a home equity loan. You enter home value, existing first mortgage balance, and the new HEL amount to see combined loan-to-value and the second lien payment alongside your first mortgage.

Who this calculator is for

Homeowners with substantial equity who want a lump sum for renovation, debt consolidation, or a major expense use fixed home equity loans when they prefer predictable payments over a variable HELOC draw period. This page sizes the second lien payment and shows how the new loan stacks on top of the first mortgage for CLTV awareness before you apply.

If you want a revolving line with interest-only draws, use the HELOC Calculator instead. For first mortgage PITI alone, use the Mortgage Calculator.

What it estimates

The calculator divides the requested HEL amount by the chosen fixed rate and term to produce a level monthly payment of principal and interest. Combined loan-to-value equals first balance plus HEL divided by home value. Some versions show total housing debt payment as first PI plus second PI, excluding tax and insurance.

Appraisal value, maximum CLTV allowed by lender, credit score pricing, and subordination agreements are not enforced. Balloon seconds, interest-only seconds, and piggyback purchase seconds at origination follow different rules than a standalone HEL after purchase.

Inputs explained

Use a realistic home value and current first mortgage payoff.

• Home value: Recent appraisal, AVM, or conservative estimate of market value.
• First mortgage balance: Amount owed on the senior lien today.
• Home equity loan amount: Lump sum you plan to borrow on the second lien.
• Interest rate: Fixed rate on the HEL quote, often higher than first mortgage rates.
• Loan term: Common terms five to thirty years depending on lender.
• First mortgage payment (optional): For total monthly debt housing comparison.

How to read the results

HEL payment is the new fixed obligation. CLTV near eighty-five percent may exceed lender caps near eighty to eighty-five percent combined, flagging that you need a higher value, lower HEL, or principal paydown on the first. Sum of first and second payments feeds DTI in the Debt Ratio Calculator.

Fixed HEL interest may be tax-deductible only when funds buy, build, or substantially improve the home securing the loan; consult a tax professional. This calculator does not model tax savings or closing costs on the second.

Worked example

Home value $420,000. First mortgage balance $210,000. New HEL $50,000 at 8.25% for fifteen years: payment about $485 monthly. CLTV is ($210,000 + $50,000) divided by $420,000, or about 61.9 percent, usually within typical limits.

If the same owner borrowed $120,000 instead, CLTV hits 78.6 percent and may approach lender maximums depending on credit and property type. Payment near $1,164 on the larger HEL plus first mortgage payment stresses DTI quickly.

Practical use cases

Compare a $50,000 HEL for a kitchen remodel against cash savings. Test consolidating $35,000 card debt into a lower-rate second lien while watching CLTV headroom for a future refi in the Refinance Calculator.

Avoid borrowing to the CLTV ceiling if you plan to sell within two years; transaction costs and market softening can trap equity. Pair with the Down Payment Calculator logic for total closing costs on the second.

Limitations and related tools

Texas home equity rules, New York subprime protections, and non-owner occupancy restrictions are not legal advice here. Foreclosure risk rises when two liens stack; the model does not stress-test unemployment. Rate locks, origination fees, and prepayment penalties vary by lender.

Revolving line math: HELOC Calculator. First lien affordability: House Affordability Calculator. Buying with two liens at once differs; see mortgage basics.

How It Works

1. Enter value and first lien. Type home value and current first mortgage balance.
2. Set HEL amount and rate. Enter the lump sum you want and the fixed HEL rate and term from a quote.
3. Calculate payment and CLTV. Run the tool and read second lien payment and combined loan-to-value.
4. Check total housing DTI. Add first mortgage payment and HEL payment into the Debt Ratio Calculator with other debts.

Formula and methodology

The Home Equity Loan Calculator uses this identity for the scenario you enter. A bank, payroll system, or tax program may round on a 360-day year or average daily balance, so a statement can differ by a small amount.