Home Equity Loan Calculator

Instantly calculate your home equity loan payments, total interest, APR, and cash received with closing costs. Free, accurate 2025 calculator with amortization schedule and pie chart breakdown.

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Estimate Your Payments and Your Home's Value.

If you've lived in your home for a few years, you're likely sitting on a significant amount of equity. In today's 2025 market, that equity is more than just a number on a statement-it's a tool you can use to actually get things done. Whether you're finally ready to gut that 1970s kitchen, pay off high-interest credit cards, or handle a major expense like tuition, a home equity loan is often the most affordable way to do it.

With rates sitting around 8% right now, it's a much smarter move than a high-interest personal loan or a credit card. We built this calculator to take the mystery out of the math. It shows you exactly what your monthly payment would be and factors in those pesky closing costs, so you can plan your next big project with total confidence.

What Is a Home Equity Loan?

Most people think of their home as a place to live, but it's also a powerful financial tool. Every time you make a mortgage payment or your home's value goes up, you're building "equity." This is basically the portion of the house that you truly own free and clear.

A home equity loan lets you tap into that value to get a lump sum of cash for big projects. For instance, if your place is worth $400,000 and you still owe $200,000, you're sitting on $200,000 of equity. Most banks will let you borrow a large chunk of that. The best part? It's a "set it and forget it" loan. Unlike a credit card where the interest can jump around, this gives you a fixed rate and a steady monthly payment that never changes.

Home Equity Loan vs. HELOC: Which Is Right for You?

Deciding between a home equity loan and a HELOC really comes down to how you plan to use the money. Think of it this way:
The Home Equity Loan: You get all your cash in one go. It has a fixed interest rate and a steady monthly payment that never changes. It's perfect if you have a big, one-time bill--like a specific $40,000 contractor quote-and you want the peace of mind of knowing exactly when it'll be paid off.
The HELOC: This works more like a credit card tied to your house. You can take out as much or as little as you need, whenever you need it. It's great for "as-we-go" projects where you aren't sure of the final cost. Just keep in mind that the interest rates usually move up and down with the market.
Why people are leaning toward loans in 2025: Since rates have been a bit of a rollercoaster lately, many homeowners are choosing the Home Equity Loan. It "locks in" your rate, so you don't have to worry about your monthly payment spiking if interest rates go up again.

How Home Equity Loan Payments Are Calculated

How Home Equity Loan Payments Are Calculated
Payments use the standard amortizing loan formula:
Monthly Payment = P × (r(1+r)^n) / ((1+r)^n - 1)
P = Loan principal
r = Monthly interest rate (annual rate / 12)
n = Number of months
Our calculator handles this instantly, plus adjustments for closing costs (which can slightly increase your effective rate if financed).

Pros and Cons of Home Equity Loans

A home equity loan can be a fantastic tool, but it's not a decision to make lightly. Here is the breakdown of why people love them--and why some people stay away.
The "Why It's Worth It" Side (Pros)
Cheaper Than the Alternatives: While an 8-10% rate isn't "free money," it's a lot better than the 15-25% interest you'll see on credit cards or personal loans.
No "Payment Shock": Since your rate is fixed, your payment today will be the same payment in five years. It makes budgeting incredibly simple.
A Potential Tax Break: If you use the money to actually improve your home (like a new roof or a kitchen remodel), you might be able to deduct the interest from your taxes. (Just be sure to double-check with your tax person first!)
Big Projects, Big Check: You get the full amount upfront, which is ideal when you have a contractor waiting for a deposit.

The "Things to Think Twice About" Side (Cons)
The Ultimate Risk: Because your house is the "security" for the loan, you have to be 100% sure you can handle the monthly bill. If you can't pay, you risk losing your home.
The Upfront Cost: Just like your first mortgage, this loan has closing costs-usually between $2,000 and $10,000. You have to decide if the lower interest rate is worth that upfront fee.
A Second Bill: You'll now have two mortgage payments to track every month.
Less "Cushion": You're essentially spending your house's value. If you decide to sell soon or if the market dips, you'll have less cash left over in your pocket.