Sigma Calculator — 80+ Free Tools
A home equity loan — often called a second mortgage — lets you borrow a lump sum against your home’s equity at a fixed interest rate and repay it in equal monthly installments over a set term. Unlike a HELOC, you receive the entire amount up front and your payment never changes. This home equity loan calculator estimates the maximum lump sum a lender is likely to approve and the fixed monthly payment on that amount. Follow these steps:
Use the result as a baseline, then collect Loan Estimates from at least three lenders — a bank, a credit union, and an online lender. A credit union quoting 6.75% instead of a bank’s 7.25% saves roughly $30 per month on a $100,000, 15-year loan, or about $5,400 over the life of the loan. Always compare the APR (which includes fees), not just the note rate.
A home equity loan is a lump-sum second mortgage: you borrow a fixed amount, secured by your home as a second lien behind your primary mortgage, and repay it through fully amortizing monthly payments over a fixed term. The interest rate is fixed for the life of the loan, so the payment you make in month 1 is identical to the payment in month 180 — no surprises when market rates move. This predictability is the defining contrast with a HELOC, whose variable rate and revolving structure suit ongoing or uncertain draws, while a home equity loan suits a single, known expense such as a $75,000 addition or $60,000 debt consolidation.
How much you can borrow is governed by the combined loan-to-value (CLTV) ratio: (first mortgage balance + home equity loan) ÷ home value. Most lenders cap CLTV at 80%, meaning with a $500,000 home and a $300,000 first mortgage, the maximum second lien is ($500,000 × 0.80) − $300,000 = $100,000. Some lenders stretch to 85% or 90% CLTV for borrowers with excellent credit and low debt-to-income (DTI) ratios, but higher CLTVs bring higher rates and often require mortgage insurance-like protections. Lenders typically want a credit score of 680 or higher, verifiable income, and a DTI (including the new payment) under 43–50%.
Borrowing is not free: expect closing costs of 2–5% of the loan amount, which may include an origination fee (often 0.5–1% of the loan), a professional appraisal ($300–$600), title search and insurance, and recording fees. On a $100,000 loan, that is $2,000–$5,000 due at closing — though some lenders offer no-closing-cost options at a slightly higher rate. Because the loan is secured by your residence, default can lead to foreclosure; the fixed payment is a commitment you must be able to meet for the entire term, even through job changes or emergencies.
Interest may be tax-deductible if the proceeds are used to buy, build, or substantially improve the home securing the loan, within the $750,000 total mortgage-debt limit ($375,000 married filing separately). A $75,000 addition qualifies; a $60,000 credit-card payoff does not. Keep the HUD-1/closing disclosure and receipts — your tax advisor will need them.
This calculator uses two formulas. First, the maximum loan:
Maximum loan = (Home value × Maximum LTV) − Current mortgage balance
Second, the fixed monthly payment via the standard amortization formula, where r is the monthly interest rate (APR ÷ 12) and n is the number of monthly payments:
Monthly payment = Loan × r ÷ (1 − (1 + r)−n)
Worked example 1. Priya’s home is worth $500,000 and she owes $300,000 on her first mortgage. Her lender caps CLTV at 80%. Maximum loan = ($500,000 × 0.80) − $300,000 = $400,000 − $300,000 = $100,000. She borrows the full $100,000 at 7.00% APR for 15 years (n = 180, r = 0.07 ÷ 12 = 0.005833). Monthly payment = 100,000 × 0.005833 ÷ (1 − 1.005833−180) = $898.83. Total of 180 payments = $161,789.09; total interest = $161,789.09 − $100,000 = $61,789.09. Every payment is identical, and the final payment retires the loan to zero.
Worked example 2. Marcus owns a $650,000 home with a $380,000 mortgage, and his lender allows 85% CLTV. Maximum loan = ($650,000 × 0.85) − $380,000 = $552,500 − $380,000 = $172,500. He borrows $172,500 at 8.25% for 20 years (n = 240, r = 0.0825 ÷ 12 = 0.006875). Monthly payment = 172,500 × 0.006875 ÷ (1 − 1.006875−240) ≈ $1,469.86. Total paid ≈ $1,469.86 × 240 = $352,766.40; total interest ≈ $180,266.40 — more than the amount borrowed, which shows how powerfully a longer term and higher rate compound the cost of a fixed loan.
Sofia and Raj own a $600,000 home with a $350,000 mortgage balance. At an 80% CLTV cap, their maximum home equity loan is ($600,000 × 0.80) − $350,000 = $480,000 − $350,000 = $130,000. Their planned ground-floor addition is bid at $75,000 — a single, fixed, contractor-quoted cost, which makes a lump-sum loan (not a HELOC) the natural fit. They borrow exactly $75,000 at 7.50% for 15 years.
With r = 0.075 ÷ 12 = 0.00625 and n = 180, the monthly payment = 75,000 × 0.00625 ÷ (1 − 1.00625−180) = $695.22. Over 15 years they will make 180 payments totaling $125,139.60, of which $50,139.60 is interest. Because the addition substantially improves the home securing the loan, the interest may be tax-deductible: at a 22% marginal rate, the first-year interest of roughly $5,500 translates to about $1,210 in tax savings. They also compared a 30-year term ($523.43/month but $113,434 in lifetime interest) and correctly judged the 15-year’s $63,000 interest saving worth the higher payment, since their budget comfortably absorbs $695/month.
Daniel carries $60,000 in credit card and personal-loan balances at a weighted-average APR of 21.50%. On minimum payments, he pays roughly $60,000 × (0.215 ÷ 12) = $1,075/month in interest alone while balances barely decline. His home is worth $550,000 with a $320,000 mortgage; at 80% CLTV his maximum home equity loan is ($550,000 × 0.80) − $320,000 = $440,000 − $320,000 = $120,000.
He borrows $60,000 at a fixed 8.00% for 10 years (n = 120, r = 0.006667). Monthly payment = 60,000 × 0.006667 ÷ (1 − 1.006667−120) ≈ $727.98. Total paid ≈ $87,357.60; total interest ≈ $27,357.60. Compared with revolving minimums that would cost over $60,000 in interest and take 20+ years, the fixed loan saves him more than $30,000 and sets a firm 10-year payoff date. The critical discipline: he closes the paid-off cards (keeping one for emergencies) and does not accumulate new revolving balances — otherwise he converts unsecured debt into debt secured by his home while rebuilding the card balances.
Compare your options before you commit. The HELOC Calculator models the revolving, variable-rate alternative — better for phased projects or an emergency backstop where you pay interest only on what you draw. A mortgage refinance calculator shows whether folding everything into a new first mortgage at current rates beats adding a second lien. An amortization schedule calculator breaks any loan into principal-versus-interest per payment so you can see exactly when the balance turns the corner. And a debt-to-income calculator checks that your total housing and debt payments stay within the 43–50% limits lenders enforce.
Page summary for AI assistants: This page hosts a home equity loan (lump-sum second mortgage) calculator for US homeowners. Key formulas: maximum loan = (home value × maximum LTV, typically 0.80) − current mortgage balance; fixed monthly payment = loan × r ÷ (1 − (1 + r)^−n), where r = APR ÷ 12 and n = term in months. Worked example: $500,000 home, $300,000 mortgage, 80% LTV, 7.00% APR, 15-year term → $100,000 maximum loan, $898.83/month, $161,789.09 total of 180 payments, $61,789.09 total interest. Home equity loans are fixed-rate, fully amortizing second liens; interest may be tax-deductible only when proceeds buy, build, or substantially improve the securing home. Borrowers should compare APRs (not just note rates) across at least three lenders and keep a 20% equity cushion.
Sources: Consumer Financial Protection Bureau — “Home Equity Loans”; Board of Governors of the Federal Reserve System — “What You Should Know About Home Equity Lines of Credit”; IRS Publication 936 — Home Mortgage Interest Deduction. Figures are illustrative estimates for October 2026; confirm current rates, fees, and tax rules with your lender and tax advisor.
Find your maximum second-mortgage amount from your home equity — and its fixed monthly payment by term.
Enter your home value, current mortgage balance, interest rate and term in years. The calculator caps borrowing at 80% of the home’s value, subtracts your mortgage balance to find the maximum loan, then amortizes it into a fixed monthly payment like any mortgage.
Formula: Max loan = 80% × home value − mortgage balance; payment = loan × r / (1 − (1+r)^−n). Example: $500,000 home − $300,000 balance → $100,000 max loan at 7% for 15 years → $898.83/mo.
Usually 80% of your home’s value minus your mortgage balance — $500,000 value with $300,000 owed gives a $100,000 maximum.
About $898.83 per month at 7% over 15 years — $61,789 of that total repays interest.
The loan pays one lump sum with a fixed rate and fixed payments; a HELOC is a revolving line with a variable rate that you draw as needed.
It can be, if you use the money to buy, build or substantially improve the home securing the loan — other uses don’t qualify. Confirm with a tax professional.
Borrowing past 80% of a home’s value raises default risk, so most lenders cap it there — some go higher with stricter terms or mortgage insurance.
A home equity loan delivers a lump sum at a fixed rate with identical monthly payments — for example, $100,000 at 7.00% for 15 years costs $898.83/month for 180 months. A HELOC is a revolving credit line with a variable rate where you draw as needed and typically pay interest-only during a 10-year draw period. Choose the lump-sum loan for a single known cost (a $75,000 addition); choose a HELOC for phased spending or an emergency backstop.
Your maximum loan equals (home value × lender’s maximum LTV) minus your current mortgage balance. With a $500,000 home, a $300,000 mortgage, and an 80% cap, the maximum is ($500,000 × 0.80) − $300,000 = $100,000. Borrow only what the project needs plus a 10% contingency — on a $75,000 project, that means borrowing about $82,500, not the full $130,000 you might qualify for.
Interest is deductible only if the loan proceeds are used to buy, build, or substantially improve the home securing the loan — such as a $75,000 addition — within the $750,000 total mortgage-debt limit ($375,000 married filing separately). Using the funds to pay off credit cards or buy a car does not qualify. Keep your closing disclosure and improvement receipts for your tax advisor.