Home equity loan calculator
Amount available against a home, allowing for the outstanding mortgage and the loan-to-value limit.
Fill in the fields and the result will appear here automatically.
A lender looks not at how much you have repaid but at how much debt sits on the property in total. The limit is therefore taken from the value of the home at the allowed loan-to-value, and the amount available is that limit minus the outstanding mortgage. Once the limit is used up it falls to zero, even when there is plenty of equity in the flat. Enter your own loan-to-value: it differs between lenders and programmes, and hard-wiring someone else's rule here would be misleading. This models an additional fixed nominal-rate loan with payments at each month-end. It does not replace a lender assessment, include fees or insurance, or model a revolving credit line.
How it works
Formula and logic
For value V, balance B and limit L%, the debt limit is V×L/100, available A=max(0,V×L/100−B), and equity E=V−B. The term becomes n=round(12×years), at least one month. A nominal annual rate r% gives i=r/1200 monthly; payment P=A×i/[1−(1+i)^−n], or A/n at zero interest. If A=0, the new payment is zero. No contractual accrual or cent-rounded repayment schedule is generated. Balance B ranges from 0 to V; negative equity is outside this model.
Example
With a value of 9 million, a balance of 3.2 million and an 80 per cent limit, 4 million is available. Boundary: value 100, limit 80% and existing debt 90 give available borrowing 0 and equity 10. This is no modeled headroom, not a new payment or lender decision.
Fields and units
- Market value of the home — $
- Outstanding mortgage balance — $
- Allowed loan-to-value, % — unitless
- Nominal annual rate, % — unitless
- Term, years — years
How to use
- — Use the market value rather than the purchase price: the lender revalues the property.
- — The outstanding balance is what is left to repay, not what has been repaid already.
- — The allowed loan-to-value differs between programmes; check yours and put it in here.
- — The payment is an annuity on the amount available — an estimate rather than a lender's offer.
Method and limitations
- Calculation method
- Formula and logic
- Data or methodology source
- CFPB, United States: equity, lump-sum loan and collateral risk; not validation of the entered limit
- Limitation
- Available borrowing follows the entered limit, not collateral verification or approval. HELOC, fees, insurance and enforcement terms are not modeled; lender rules depend on contract and jurisdiction.
FAQ
Why is the available amount less than my equity?
At L below 100%, the reserve V×(1−L/100) is excluded from the property value before existing debt is subtracted. You choose L for the conditions being modelled; there is no universal limit. At L=100%, available borrowing can equal equity.
What is loan-to-value?
It is the ratio of all debt secured on the property to its value. Eighty per cent means the total debt after the new loan must not exceed eighty per cent of the valuation.
Why can the available amount be zero?
If the outstanding mortgage already reaches the limit there is no free security left. That happens after a recent purchase with a small deposit, or when house prices fall.
Is this the same as refinancing?
Refinancing replaces an existing debt with a new one. This model adds borrowing while retaining the old balance; the displayed payment covers only the new amount. Rates, security conditions and total costs must be compared using the actual contracts.