How to Calculate Home Equity Loan
Calculate the monthly payment, total interest and total cost of a fixed-rate home equity loan, your combined LTV after the loan, and the most you could borrow at 80%, 85% and 90% CLTV caps.
The Formula
monthlyPayment = loanAmount * (APR / 1200) / (1 - (1 + APR / 1200) ^ (-termYears * 12)); combinedLTV = (mortgageBalance + loanAmount) / homeValue * 100The home equity loan formula uses the mathematical relationship: monthlyPayment = loanAmount * (APR / 1200) / (1 - (1 + APR / 1200) ^ (-termYears * 12)); combinedLTV = (mortgageBalance . Each variable in the formula represents a measurable quantity that affects the final result.
Step-by-Step Method
- 1Identify all input values needed for the home equity loan calculation.
- 2Substitute your known values into the formula: monthlyPayment = loanAmount * (APR / 1200) / (1 - (1 + APR /.
- 3Perform the arithmetic operations in the correct order (PEMDAS/BODMAS).
- 4Check that your result has the correct units and is within a reasonable range.
- 5Verify using the interactive Home Equity Loan Calculator to confirm your answer.
Related Topics
home equity loansecond mortgageCLTVfixed rateequity loan payment
Use the Interactive Calculator
Skip the manual math — get instant results with our free Home Equity Loan calculator.