Equity Loan Calculator

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Reviewed by: David Chen, CFA
David is a Chartered Financial Analyst specializing in consumer credit and home equity products. He has over 15 years of experience helping homeowners leverage their equity responsibly.

This 4-in-1 Home Equity Loan calculator helps you model your fixed-rate loan payments. Enter any three variables—Loan Amount, Annual Rate, Term, or Monthly Payment—and we will solve for the fourth.

Loan Amount ($) (P)

Annual Rate (%) (R)

Loan Term (Years) (T)

Monthly Payment ($) (M)

Equity Loan Payment Formulas

Solve for Monthly Payment (M):
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Solve for Loan Amount (P):
P = M [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]

Solve for Loan Term (T):
T = ln(M / (M – Pi)) / (n * ln(1 + i))

Solve for Rate (R):
Solved iteratively (no direct formula)

Formula Source: Consumer Financial Protection Bureau

Formula Variables

(P) Loan Amount: The total lump sum you borrow with the home equity loan.
(R) Annual Rate: The fixed annual interest rate (APR) for your equity loan.
(T) Loan Term: The total number of years you have to repay the loan (e.g., 10, 15, or 20 years).
(M) Monthly Payment: The fixed monthly payment (Principal & Interest) required to pay off the loan in the specified term.
(i) Monthly Rate: The annual rate divided by 12.
(n) Total Payments: The total number of payments (Term in years * 12).

Related Calculators

What is an Equity Loan Calculator?

A Home Equity Loan Calculator is a financial tool used to determine the monthly payments for a fixed-rate loan that is secured by the equity in your home. Unlike a Home Equity Line of Credit (HELOC), which is a revolving line of credit, a home equity loan provides you with a single, lump-sum payment upfront.

This calculator is designed to model that loan. Because home equity loans typically have a fixed interest rate and a fixed repayment term, your monthly payment will remain the same for the life of the loan. This makes them predictable and easy to budget for.

By entering any three of the four main variables—Loan Amount, Annual Rate, Loan Term, or Monthly Payment—this calculator can solve for the missing one. This allows you to explore different scenarios, such as how your payment changes with a different loan term or how much you can borrow with a specific monthly payment in mind.

How to Calculate Equity Loan Payments (Example)

Identify Your Variables
Imagine you take out a Home Equity Loan (P) for $50,000. Your bank gives you a fixed Annual Rate (R) of 7.5% and a Repayment Term (T) of 15 years. You want to find your Monthly Payment (M).
Convert Annual Rate to Monthly (i)
First, convert the annual rate to a monthly decimal: i = (7.5% / 100) / 12 = 0.075 / 12 = 0.00625
Calculate Total Number of Payments (n)
Next, find the total number of monthly payments: n = 15 Years * 12 Months/Year = 180 payments
Apply the Amortization Formula
Use the standard loan payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M = 50,000 [ 0.00625 * (1 + 0.00625)^180 ] / [ (1 + 0.00625)^180 – 1 ]
M = 50,000 [ 0.00625 * (3.0614) ] / [ 3.0614 – 1 ]
M = 50,000 [ 0.019134 ] / [ 2.0614 ]
M = 50,000 * 0.009282
M = $464.10
Final Result
Your fixed monthly principal and interest payment for the 15-year equity loan will be $464.10.

Frequently Asked Questions (FAQ)

What’s the difference between an Equity Loan and a HELOC?

A Home Equity Loan (HEL) provides a one-time lump sum of cash and has a fixed interest rate, meaning your payment is stable. A HELOC (Home Equity Line of Credit) is a revolving line of credit (like a credit card) with a variable interest rate, giving you flexibility but less predictable payments.

Why is my Equity Loan payment fixed?

Home equity loans are structured as standard amortizing loans, just like a traditional mortgage or auto loan. You receive all the money at once and agree to pay it back over a set term (e.g., 15 years) at a fixed interest rate. This calculator models that exact structure.

How much can I borrow with an Equity Loan?

You can use this calculator to find out! Enter the Monthly Payment (M) you can afford, the current Annual Rate (R) you’ve been offered, and the Loan Term (T) you want. The calculator will solve for the Loan Amount (P) you can support with those numbers.

Can I solve for the loan term (T)?

Yes. If you know how much you need to borrow, your interest rate, and how much you can afford to pay each month, this calculator can tell you how many years it will take to pay off the loan. Leave the “Loan Term (Years)” field empty and fill the other three.

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