What's the difference between home equity loan and HELOC?
Home equity loans provide a lump sum with fixed rate and payment. HELOCs are revolving credit lines with variable rates. Choose loans for one-time expenses; HELOCs for ongoing needs.
Debt Management
Home Equity Loan Amortisation Calculator
Understand your monthly payments, total interest, and see when you cross the break-even point after closing costs.
Capitalize on Home Equity
Take a careful look at how monthly payments and fees accumulate.
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What this calculator does
A home equity loan lets you borrow against your home's value, providing a lump sum with fixed monthly payments. This calculator generates an amortization schedule showing how each payment divides between principal and interest over the loan term.
How it works
You input the loan amount, interest rate, and term in years. The calculator determines your fixed monthly payment and creates a month-by-month schedule showing principal paid, interest paid, and remaining balance. It reveals total interest over the loan's life.
Formula
Monthly Payment = P × [r(1+r)^n] / [(1+r)^n - 1], where P = loan amount, r = monthly rate (APR ÷ 12), n = total months. Total Interest = (Monthly Payment × n) − P.
Tips for using this calculator
- Home equity loan rates are typically lower than credit cards or personal loans
- Your home is collateral—failure to pay risks foreclosure
- Compare to HELOC (variable rate line of credit) for flexibility
- Consider tax implications; interest may be deductible for home improvements
- Shop multiple lenders—rates and fees vary significantly
Frequently asked questions
How much equity can I borrow?
Most lenders allow borrowing up to 80-85% of home value minus existing mortgage. If home is worth $400,000 and you owe $200,000, you might access $120,000-$140,000.
Is home equity loan interest tax deductible?
Interest is deductible if funds are used for home improvements (buying, building, or substantially improving your home). Interest on funds used for other purposes is not deductible.