Home Equity Loan Calculator

What this home equity loan calculator does

A home equity loan is a second mortgage that pays you a lump sum and is repaid in fixed monthly installments. Because it is secured by your home, the rate is often lower than an unsecured personal loan, but the home is collateral for the debt.

This calculator estimates the monthly payment, total interest, and the cash you actually receive after an origination fee. It can treat the fee as an amount or as a percentage of the loan, and it can either deduct the fee from the proceeds or add it to the cost of the loan.

How to use this calculator

1. Enter the loan amount, interest rate, and term.
2. Enter the origination fee and choose whether it is a dollar amount or a percentage.
3. Choose whether the fee is deducted from the loan or paid upfront.
4. Click Calculate to see the payment, total interest, cash received, and total cost.

The default example is a $150,000 loan at 8% for 15 years with a $7,500 origination fee deducted from the loan.

Home equity loan formulas

Origination fee = Fee amount (or Loan amount × Fee % ÷ 100)
Monthly payment = amortized payment on the loan amount
Total payments = Monthly payment × Number of months
Total interest = Total payments − Loan amount
Cash received = Loan amount − Origination fee (when deducted)
Total cost = Total payments + Origination fee (when paid upfront)

The amortized payment formula is the same one used for any fixed-rate installment loan:

M = P × r × (1 + r)^n / ((1 + r)^n − 1)

P is the loan amount, r is the monthly interest rate, and n is the number of monthly payments.

What the results mean

• Cash received at closing: the amount left after a deducted fee. If the fee is paid upfront, you receive the full loan amount and pay the fee separately.
• Monthly payment: principal and interest only.
• Total interest: the cost of borrowing over the full term.
• Total cost of the loan: all payments plus any fee paid upfront.
• Payoff date: the month of the final scheduled payment.
• Amortization schedule: the annual principal, interest, and ending balance, shown in a full-width table below the result card.

Deducting the fee reduces the cash you receive but does not change the contractual loan balance or the monthly payment. Paying it upfront preserves the cash proceeds but raises the total cost. Neither option is automatically better; the right choice depends on how much cash you need and how much you can pay at closing.

Assumptions and limitations

The calculator assumes a fixed interest rate, a fully amortizing loan, and no prepayment, late fees, or escrow. It does not check your home value, the balance of your first mortgage, your combined loan-to-value ratio, your credit, or state-specific closing costs. Lenders may require a lower CLTV and may charge appraisal, title, and recording fees that are not modeled here.

Interest on a home equity loan may be tax-deductible in some circumstances, but tax rules depend on how the funds are used and on your personal situation. This calculator does not provide tax advice.

Frequently asked questions

How is a home equity loan different from a HELOC?

A home equity loan delivers a lump sum with a fixed rate and a fixed repayment schedule. A HELOC is a revolving line of credit with a draw period and a repayment period, and its rate is usually variable.

Why is the cash received lower than the loan amount?

If the origination fee is deducted, the lender keeps that amount from the proceeds. You still owe payments on the full loan balance. Choosing the upfront option avoids that reduction but requires cash at closing.

Does this calculator check whether I qualify?

No. It does not verify income, credit, home equity, or CLTV limits. It only performs the payment and fee math. A lender makes the actual approval decision.

Can I pay the loan off early?

The calculator does not model early payoff or prepayment penalties. Many home equity loans allow extra principal payments, but the terms vary by lender. Check your loan agreement before assuming that early repayment will save a specific amount.

Source

References:

• Consumer Financial Protection Bureau — Loan options
• Consumer Financial Protection Bureau — Mortgages

Disclaimer

This calculator is for informational and educational purposes only. It is not a loan offer, a commitment to lend, or financial advice. Rates, fees, and eligibility rules vary by lender and location. Confirm all figures with a qualified lender before borrowing against your home.