Home Equity Loan Calculator – Borrowing Power & LTV
Estimate your available equity, loan-to-value (LTV), and potential borrowing power instantly. Our tool provides clear, transparent calculations and instant results—no sign-ups or personal data required.
⚠️ Advisory only: The results are estimates for guidance. Always confirm final loan amounts, terms, and eligibility with your chosen lender or certified financial adviser before borrowing.
Calculate Your Home Equity & Maximum Borrowing Limit
Enter property value, current balances, and CLTV to estimate borrowing power.
What is a Home Equity Loan?
A Home Equity Loan (often called a “second mortgage”) allows you to borrow a lump sum of money using your home as collateral. Since your home secures the loan, these often have lower interest rates than unsecured personal loans.
This lump-sum structure is the key difference from a Home Equity Line of Credit (HELOC), which functions more like a credit card, allowing you to withdraw funds as needed up to a set limit during a draw period.
Key Risks and Considerations
While attractive due to lower rates, a home equity loan poses one significant risk: Your home is on the line. If you fail to repay the loan, your lender has the right to foreclose on your property. Use this calculator to determine a safe borrowing limit that keeps your Loan-to-Value (LTV) ratio within manageable limits.
Why Use This Home Equity Calculator?
By understanding your equity and key ratios, you can approach lenders confidently and safely plan your borrowing strategy.
Snapshot of Available Equity
See estimated equity from value minus mortgages.
LTV & CLTV Calculations
Check loan-to-value and combined LTV for safer borrowing.
Determine Safe Borrowing Power
Estimate how much you might be allowed to borrow under a max LTV.
Transparent Formula-Based Results
We show the formulas and assumptions used.
Home Equity Calculation Process (3 Simple Steps)
Add property value
Use a recent appraisal or market estimate.
Enter mortgage balances
Include first mortgage and any second liens.
Review equity & max borrow
See LTV/CLTV vs your target lender limit.
How Home Equity Calculations Work
The tool estimates your available equity and potential borrowing power using standard lending industry ratios.
Understanding the Formulas
- Home equity:
Equity = Property Value − Sum of all existing liens (Mortgages, HELOCs, etc.
- LTV (Loan-to-Value): Measures the first mortgage lien against the value.
LTV = Current first-lien balance ÷ Property Value
- CLTV (Combined LTV): Measures ALL debt against the value.
CLTV = (All existing liens + New loan) ÷ Property Value
- Max borrowing at target LTVmax:
MaxBorrow ≈ (LTVmax × Value) − Existing liens
- Optional Payment Estimate (If shown): This is calculated using the standard annuity formula for loan repayments.
PMT = r × PV / (1 − (1 + r)−n), where r = monthly rate, n = total months.
Assumptions: All figures are illustrative and do not include fees, closing costs, insurance, or rate changes. Final eligibility and loan terms require full lender assessment. For a deeper look at repayment modeling, use our Loan Calculator.
Home Equity Loan Calculator – FAQs
What Users Say About Our Tools
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⚠️ All services are offered on an advisory basis only. We do not act as legal or financial representatives, and we do not guarantee outcomes. Any actions taken based on our guidance are the responsibility of the individual.