Home Equity2 Calculator
The Home Equity Calculator helps you determine how much money you can borrow using the equity in your house as collateral. You can also compare a home equity loan against a home equity line of credit.*
- Enter ballpark values by dragging the sliders left or right.
- Enter exact numbers by clicking in the box and type your number (no commas). The results of your calculations show in the box near the middle of the calculator.
- Property Value
- This is the estimated or actual appraised value of your home.
- Mortgage Value
- This is the amount you still owe on your mortgage. If you have multiple mortgages on your home, total them and enter the total amount here. You can type in 125000+275000, hit the Enter key, and the calculator will compute and enter $400,000 for you.
- Loan to Value Ratio
- The is the percentage of the equity you’d like to borrow. The default amount is 100%. However, the financial institution from which you are getting your loan may allow a maximum loan-to-value (LTV) ratio of less than 100% (see the results box), or, you may wish to borrow a specific percentage.
- Amount to Borrow
- This is the amount of money you want to borrow. The default amount is 100% of your equity, which is the difference between the value of your home and the amount of the outstanding mortgage(s) you hold (the money you still owe on your home). The amount you enter here affects the Percent of Equity to Borrow values, which can never be more than 100%. If you enter an amount that is more than 100% of the amount of equity you have in your home, the calculator will correct your input and show the maximum value allowed.
- You are shown your total debt and your LTV (loan-to-value) ratio. Check with your financial institution to see for what LTV you qualify.
Home Equity Loan
A home equity loan is based on a set amount of funds needed up-front at the closing of the loan. Typically, home equity loans have a fixed rate, a fixed monthly payment and a set term (length of the loan, usually longer than 5 years). Home equity loans are good if you don’t need to periodically withdraw funds.
- Annual Loan Rate
- This is the annual percentage rate the financial institution charges you for lending you their money.
- Payoff Period
- You are required to repay your loan in a certain amount of time. This is the payoff period, also known as the term of the loan.
- Monthly Payment
- This is the amount of money you agree to repay monthly to the financial institution who loaned you the money. In a home equity loan, this amount is the same from month to month.
- Total Interest Paid
- The interest is the amount the loan costs you. You have to repay the amount you borrowed. Above and beyond that, you have to pay for the use of the money you borrowed. The total interest paid is what the loan cost you at the end of your payoff period (term).
Home Equity Line of Credit
A home equity line of credit is like a credit card. You can borrow up to a maximum amount at different times. Your monthly payments change, depending on how much you’ve borrowed. Rates typically change during the term of the loan, as well. Home equity lines of credit are ideal if you need to periodically withdraw funds. Note: For purposes of comparison to the home equity loan, it is assumed you get all your loan money up front and that you have a fixed payoff period.
- Intro Loan Rate
- This is the annual percentage introductory rate the financial institution charges you during the introductory period. The intoductory rate is also known as the teaser rate, and is generally lower than the loan rate which is valid for the rest of the loan period after the introductory period is over.
- Intro Period
- The introductory period is the relatively short time during which you pay the introductory rate.
- Intro Monthly Payment
- The introductory monthly payment is the amount of money you have to repay the lending institution every month during the introductory period.
- Total Interest Paid
- The interest is the amount the line of credit costs you. You have to repay the amount you borrowed. Above and beyond that, you have to pay for the use of the money you borrowed. The total interest paid is what the loan cost you at the end of your payoff period (term).
- Loan Rate
- This is the percentage rate the financial institution charges you for lending you their money. This rate becomes effective after the introductory period is over.
- Payoff Period
- For purposes of comparison to the home equity loan, it is assumed you get all your loan money up front and that you have a fixed payoff period. In reality, a line of credit allows you to borrow different amounts at different times. The payoff period changes based on how much loan balance you have outstanding.
- Monthly Payment
- This is the amount of money you have to repay every month to the financial institution, once the introductory period is over. It is based on the assumption that you initially received the same amount of loan as in the home equity loan example. It is assumed you received all the loan money up front.
- Expected Change
- Since the interest rate is variable, you can estimate if the rate will go up, stay the same or go down while you’re borrowing and repaying on the loan.
- The graph shows lines that compare the two kinds of loans. When you move your cursor over the graph area, a flyover shows you figures that compare the two loans at that particular point in the loan term.
*Calculators provided are estimation tools and do not necessarily reflect products, terms or rates that Home Federal Bank may offer. Please contact your Home Federal banker to verify results.