Home Equity Loan Calculator: Monthly Repayment

A home equity loan repayment calculator estimates the fixed monthly principal-and-interest payment and total interest from the amount borrowed, APR, and term. Enter those three figures to see the scheduled payment; the estimate does not include lender fees, taxes, or other housing costs.

Formula

The calculator uses the standard fixed-payment amortization formula. It divides the loan amount multiplied by the monthly interest rate by the portion of the balance repaid through each level payment:

Monthly payment = P × r ÷ [1 − (1 + r)⁻ⁿ]

• P is the principal borrowed, in dollars.
• r is the monthly interest rate as a decimal: APR ÷ 1,200. For an 8% APR, r = 0.08 ÷ 12.
• n is the number of monthly payments: loan term in years × 12.

Total interest is calculated as monthly payment × n − P. The displayed payment is rounded to cents, and total interest uses that rounded payment. The calculation assumes equal monthly payments and a fixed APR.

Worked Example

Using the calculator’s default values—$20,000 borrowed, 8% APR, and a five-year term:

1. Convert APR to a monthly decimal rate: 8 ÷ 1,200 = 0.0066667.
2. Convert the term to payments: 5 × 12 = 60 months.
3. Apply the formula: $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰] = approximately $405.53 per month.
4. Calculate total payments using the rounded monthly amount: $405.53 × 60 = $24,331.80.
5. Subtract principal: $24,331.80 − $20,000 = $4,331.80 in estimated interest.

The monthly payment shown by the calculator is $405.53. Small differences can arise if a lender calculates interest daily, uses different payment dates, or rounds amounts differently.

Assumptions

• The interest rate remains fixed for the entire term.
• Payments are equal, made monthly, and begin one month after the loan is issued.
• Interest compounds monthly at APR divided by 12.
• Fees, taxes, insurance, mortgage insurance, escrow, and any charges added to the balance are not included.

How Home Equity Loan Repayment Works

A home equity loan provides a lump sum that is repaid over an agreed term. Unlike a revolving line of credit, a conventional fixed-rate home equity loan generally has a scheduled payment that combines interest and principal. In early payments, a larger share typically goes toward interest; as the balance declines, more of each level payment goes toward principal.

The calculator estimates the payment for the amount you plan to borrow—not the amount of equity in your home. Equity is generally the difference between a home’s value and the mortgage debt secured by it, but a lender determines the amount it may offer and the terms. Those figures depend on the lender’s assessment and are not calculated here.

Use the quoted loan amount, APR, and repayment term from the lender’s written estimate or disclosure when available. APR may reflect certain borrowing costs differently from a stated interest rate, and lender calculation methods can affect the exact schedule. The APR field is an input, not a prediction of what rate anyone will receive.

How to Use and Interpret the Estimate

• Enter principal: use the amount borrowed, rather than your home’s value or total available equity.
• Enter APR: use the annual percentage rate as a percent, such as 8 for 8%, not 0.08.
• Enter the term: use years. The calculator converts the term into monthly payments.
• Review both outputs: the payment is the scheduled monthly principal-and-interest amount; total interest is the estimated interest across the full term.

A longer term generally spreads repayment over more months and changes both the monthly payment and total interest. A shorter term compresses repayment into fewer payments. The calculator shows the arithmetic for the inputs entered; it does not determine whether a payment is manageable or whether an application will be approved.

For a useful comparison of two quoted offers, keep the principal the same and enter each offer’s APR and term separately. Then account for costs excluded from this calculation using the lender’s documents. A lower monthly payment alone does not describe the full cost, because term length and fees also matter.

Costs, Limits, and Common Mistakes

The estimated payment is not necessarily the amount that will leave a bank account each month. It omits fees and any separately billed property expenses. If a lender finances a fee by adding it to the loan balance, the amount entered as principal should reflect the balance actually being repaid to model that effect. Ask the lender which figures are included in its payment quote.

• Confusing APR and monthly rate: enter annual APR as a percentage; the formula divides it by 12 and by 100.
• Entering a home value instead of loan amount: only the borrowed principal belongs in the principal field.
• Mixing years and months: the term input is years, not the number of monthly payments.
• Expecting an exact payoff quote: accrued interest, payment dates, fees, and lender rounding can make the actual balance differ.
• Assuming total interest includes every borrowing cost: it does not include fees or other expenses omitted from the inputs.

This model is not a quote, amortization statement, equity estimate, or approval calculation. It assumes all scheduled payments are made on time and no additional principal payments, skipped payments, rate changes, or balance adjustments occur. For an exact payment schedule, compare the estimate with the lender’s disclosed terms.

Frequently Asked Questions

How do I calculate a home equity loan payment?
Use the principal, monthly rate (APR divided by 1,200), and number of monthly payments in the fixed-payment formula. The calculator applies that formula and rounds the monthly amount to cents.

Does a home equity loan payment include taxes and insurance?
No. This estimate covers principal and interest only. Check lender documents and separate bills for any taxes, insurance, fees, or escrow amounts that apply.

Is a home equity loan payment fixed?
This calculator assumes a fixed APR and equal monthly payments. A loan with different rate terms or payment rules will not match this estimate; use the terms in the lender’s disclosure.

Why is the lender’s payment different from the calculator?
The lender may use different rounding or payment timing, or its quoted amount may include fees or other charges. Compare the principal, APR, term, and included costs line by line.

Does this calculator show how much equity I can borrow?
No. It calculates repayment for a loan amount you enter. It does not value the home, calculate available equity, or model a lender’s eligibility and loan-size assessment.

Can I use it to estimate extra-payment savings?
Not directly. The calculator assumes only the scheduled level payment and does not model extra principal, early payoff dates, or any related charges. Ask the lender for an updated payoff or amortization estimate.

This result is an estimate for educational purposes; the lender’s disclosure gives the exact figures.

Related

• Mortgage Calculator With Escrow: Payment With Tax and Insurance
• Mortgage Loan Amount Calculator: The Loan a Monthly Payment Repays
• Home Equity Loan Calculator: Amount Up to a CLTV Limit and Payment

in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2