Home Equity Loan Calculator
Work out the fixed monthly payment, total interest and lifetime cost of a home equity loan — a lump-sum, fixed-rate second mortgage secured against your home.
Monthly payment
£463.51
- Total repaid over loan
- £83,431.11
- Total interest paid
- £33,431.11
- First payment — interest portion
- £312.50
- First payment — principal portion
- £151.01
- Balance after 7.5 years
- £31,831.30
A home equity loan is a fixed-rate second mortgage paid back in equal monthly instalments. Every payment is the same size, but early payments are mostly interest — the principal portion grows over time, and the balance falls slowly at first then faster near the end of the term.
How to use this calculator
Enter how much you want to borrow against your home equity, the fixed annual interest rate (APR) your lender has quoted, and the repayment term in years (commonly 5, 10, 15, 20 or 30). The calculator returns the level monthly payment, the total amount you will repay over the life of the loan, the total interest cost, the split of the very first payment between interest and principal, and the remaining balance at the half-way point of the term.
How the calculation works
A home equity loan is a fixed-rate, fully-amortising loan: every monthly payment is the same size and covers both interest and a portion of principal. The payment uses the standard amortisation formula P = L × r / (1 − (1+r)^−n), where L is the loan amount, r is the monthly rate (annual APR ÷ 12) and n is the number of monthly payments (term in years × 12). Because interest is charged on the remaining balance, the interest portion of each payment is highest at the start and shrinks over time, while the principal portion grows. Total interest is simply monthly payment × number of payments minus the original loan amount.
Worked example
Borrow 50,000 at a fixed 7.5% APR over 15 years (180 monthly payments). Monthly rate = 7.5 ÷ 12 ÷ 100 = 0.00625. Monthly payment = 50,000 × 0.00625 / (1 − 1.00625^−180) ≈ 463.51. Total repaid over 15 years ≈ 83,432, of which 33,432 is interest. The very first payment splits roughly 312.50 of interest and 151.01 of principal, and the balance still owed after 7.5 years is around 32,260 — past the halfway point in time but well over halfway in money owed, the characteristic shape of amortisation.
Frequently asked questions
What is a home equity loan?
A home equity loan is a lump-sum second mortgage secured against the equity in your home. The lender pays you the full loan amount up front; you repay it over a fixed term (commonly 5–30 years) in equal monthly instalments at a fixed interest rate. Because the loan is secured by your home, rates are usually lower than personal loans or credit cards, but missing payments puts your property at risk of foreclosure (US) or repossession (UK).
Home equity loan vs HELOC — which should I use?
A home equity loan gives you a single lump sum at a fixed rate, with a fixed monthly principal-and-interest payment from day one — ideal when you know exactly how much you need (a kitchen remodel quoted at 60,000, a debt consolidation pay-off, a known medical bill). A HELOC is a revolving line of credit at a typically variable rate, with interest-only payments during a draw period — ideal when expenses are staged or uncertain (a multi-phase renovation, an emergency buffer). Use this calculator for a home equity loan; use the HELOC calculator for a line of credit.
How much can I borrow with a home equity loan?
Most lenders cap total debt secured against your home — first mortgage plus home equity loan — at a combined loan-to-value (CLTV) of 80%–90% of the property’s appraised value. On a 400,000 home with a 200,000 first mortgage and an 85% CLTV cap, the maximum home equity loan would be 400,000 × 0.85 − 200,000 = 140,000. Actual approved amounts also depend on your credit score, debt-to-income ratio and verifiable income.
What interest rate should I expect on a home equity loan?
Home equity loan rates are fixed for the life of the loan and are typically a percentage point or two above prevailing 30-year mortgage rates. In 2026, US rates have commonly been quoted in the high single digits for well-qualified borrowers, with UK secured second-charge loans in a similar range against Bank of England base rate plus a margin. Your actual rate will depend on credit profile, CLTV, term and the lender’s pricing — always shop several quotes.
Are there fees on a home equity loan?
Yes — common closing costs include an application fee, appraisal fee, title search, origination fee (often 0.5%–2% of the loan), and recording fees. Some lenders offer "no closing cost" home equity loans but recoup those costs through a higher interest rate. Always compare loans on APR (which includes most fees) rather than headline interest rate alone, and ask the lender for a full schedule of charges before signing.
Can I pay a home equity loan off early?
Usually yes — most US home equity loans allow extra principal payments or full early repayment without penalty, though a minority charge a prepayment fee in the first few years. In the UK, secured second-charge loans must disclose any early repayment charge in the loan agreement under FCA rules. Paying extra against principal early in the term saves the most interest because it removes future interest accrual on that balance.