Calculate the fixed monthly payment, total interest, and amortization schedule for a home equity loan — a lump-sum second mortgage borrowed against your home's equity. Note this models a fixed-rate home equity loan specifically, not a revolving HELOC line of credit, which typically has a separate variable-rate draw period.
A home equity loan gives you a lump sum upfront with a fixed rate and fixed monthly payment, similar to a second mortgage. A HELOC (home equity line of credit) works more like a credit card — a revolving credit line, often with a variable rate and an interest-only draw period before repayment begins. This calculator models the fixed-payment home equity loan structure.
Most lenders want you to retain at least 15-20% equity in your home after the new loan, meaning your combined mortgage and home equity loan balance generally can't exceed 80-85% of your home's appraised value.
Common uses include home renovations, debt consolidation, and major expenses, since the fixed payment and lump-sum structure make it easier to budget for a specific, known cost compared to a revolving HELOC.