igmetricYour home & mortgage
How the numbers work
- Equity is home value minus mortgage balance. LTV (loan-to-value) is the balance divided by the value.
- CLTV (combined LTV) adds any new borrowing on top: (mortgage balance + new loan) ÷ home value. Most lenders cap equity products at 80% CLTV, so your max additional borrowing is 80% of the value minus what you already owe.
- Payments are estimated as fully amortizing — equal monthly payments of principal and interest until the balance hits zero at the end of the term. Many HELOCs instead start with an interest-only draw period, so early payments can be lower and later payments higher than shown.
- These are estimates, not offers. Real rates depend on your credit, income, debt-to-income ratio, and the lender. Edit the sample rates to match quotes you're actually seeing.
Frequently asked questions
What's the difference between a HELOC and a home equity loan?
A home equity loan gives you a lump sum at a fixed rate with fixed monthly payments — like a second mortgage. A HELOC is a revolving credit line with a variable rate: you draw what you need during the draw period (often interest-only payments), then repay principal plus interest during the repayment period. Loans suit one-time expenses; HELOCs suit ongoing or uncertain costs.
Why do lenders cap borrowing at 80% CLTV?
Combined loan-to-value (your mortgage plus any new borrowing, divided by home value) above 80% leaves the lender thinly protected if prices fall. Most lenders cap equity products at 80% CLTV; going above it usually means tighter underwriting, higher pricing, or no approval at all.
Can I borrow more than 80% of my home's value?
Some lenders go to 85–90% CLTV with mortgage insurance and stricter credit requirements, but rates and fees are worse and fewer lenders offer it. This calculator uses the standard 80% ceiling because it's what most borrowers will actually be offered.
Are these rates real offers?
No. The sample rates are editable starting points, not quotes or offers. Your actual rate depends on your credit score, income, debt-to-income ratio, the lender, and market conditions. Use the table to compare scenarios, then shop real quotes.
How is the monthly payment estimated?
As a fully amortizing payment — principal and interest every month until the balance is zero at the end of the term. Many HELOCs instead have an interest-only draw period followed by a repayment period, so early HELOC payments can be lower (and later ones higher) than shown.
Is home equity borrowing tax deductible?
Interest on home equity debt is generally deductible only if the money is used to buy, build, or substantially improve the home securing the loan — and only if you itemize deductions. Using it to pay off credit cards or buy a car doesn't qualify. Tax rules change; confirm with a tax professional.