A worked example
A home worth $500,000 with a $300,000 mortgage balance, at an 85% combined LTV cap, has $125,000 in available equity. Borrowing $80,000 of that at 8.5% over 15 years comes to about $788 a month.
Frequently asked questions
How is this different from a HELOC?
A home equity loan pays out as one lump sum upfront with a fixed rate and fixed payment from day one. A HELOC is a revolving credit line you draw from as needed, typically with a variable rate and an interest-only draw period before repayment begins.
What does 'combined LTV' mean?
Loan-to-value combining everything secured against the home — your existing mortgage balance plus the new loan — measured against the home's current value. Lenders cap this combined figure, commonly somewhere between 80-90%.
Why would I choose a home equity loan over refinancing my whole mortgage?
If your existing mortgage has a great rate you don't want to disturb, a home equity loan lets you tap equity without touching that first mortgage at all — refinancing the whole thing only makes sense if you also want to change the primary loan's rate or terms.
This calculator provides estimates for general informational purposes only and is not financial advice. Actual available equity and rates depend on your lender and creditworthiness.