How much equity do I have in my home?

Home equity = current market value minus what you owe on your mortgage. For example, if your home is worth $400,000 and you owe $250,000, you have $150,000 in equity (37.5% equity). You can estimate your home's value using Zillow, Redfin, or a recent appraisal.

How much can I borrow with a HELOC or home equity loan?

Most lenders allow you to borrow up to 80-85% of your home's value minus your existing mortgage balance. So if your home is worth $400,000 and you owe $250,000: $400,000 × 85% = $340,000 minus $250,000 = $90,000 maximum borrowing power. Some lenders go up to 90% LTV for borrowers with excellent credit.

What's the difference between a HELOC and a home equity loan?

A home equity loan gives you a lump sum with a fixed interest rate and fixed monthly payments (like a second mortgage). A HELOC is a revolving line of credit with a variable rate — you draw money as needed during a 10-year draw period, then repay over 10-20 years. HELOCs offer more flexibility; home equity loans offer more predictability.

What are current HELOC and home equity loan rates in 2026?

As of early 2026, average HELOC rates range from 7.0% to 10.5% APR (variable), and home equity loan rates range from 7.5% to 10.0% APR (fixed). Rates depend on your credit score, LTV ratio, and lender. Borrowers with credit scores above 740 and LTV below 60% typically get the best rates.

Home Equity & HELOC Calculator (2026) | How Much Can You Borrow?

Home Equity Calculator

Enter your home details to see equity, borrowing power, and loan comparison

Current Home Value (estimate from Zillow/Redfin)

Outstanding Mortgage Balance

Max LTV Allowed (most lenders: 80-85%)

Amount You Want to Borrow

HELOC Rate (variable, avg 7-10.5%)

Home Equity Loan Rate (fixed, avg 7.5-10%)

HELOC Draw Period (interest-only years)

Repayment Term (after draw / HEL total)

Credit Score Range

Your Home Equity

—

Equity %

—

of home value

Max Borrowing Power

—

Current LTV

—

loan-to-value ratio

🏠 Equity Visualization

—

$0—

HELOC vs Home Equity Loan Comparison

How Home Equity Works

Home equity is simply what your home is worth minus what you owe. As you pay down your mortgage and your home appreciates, your equity grows. You can tap this equity through three main products:

🏦

HELOC

Revolving credit line with variable rate. Draw money as needed for 10 years, then repay over 10-20 years. Best for ongoing expenses like renovations. Interest-only payments during draw period.

💰

Home Equity Loan

Lump sum with fixed rate and fixed payments. Like a second mortgage. Best for one-time expenses with a known cost. Predictable monthly payments for the full term.

🔄

Cash-Out Refinance

Replace your existing mortgage with a larger one and pocket the difference. Best when current rates are lower than your existing rate. Higher closing costs ($2-5K+).

📊

LTV Ratio

Loan-to-Value ratio = (mortgage balance + new loan) ÷ home value. Most lenders cap at 80-85% combined LTV. Lower LTV = better rates and easier approval.

When to Use Each Option

Scenario	Best Option	Why
Kitchen remodel ($30K)	Home Equity Loan	Known cost, fixed payments, done in one draw
Ongoing renovations	HELOC	Draw money as needed over months/years
Debt consolidation	Home Equity Loan	Fixed rate, predictable payoff timeline
Emergency fund access	HELOC	Only pay interest on what you use
High existing mortgage rate	Cash-Out Refi	Replace high rate + access equity in one loan

Smart Ways to Save on Home Equity

Compare prices from multiple providers. Pricing for home equity varies significantly. Spending 30 minutes getting 3–5 quotes can save you 20–40% on the same service or product.

Understand the total cost of ownership. The upfront price is just the beginning. Ongoing maintenance, supplies, insurance, and eventual replacement or upgrade costs all factor into what you will actually spend over time.

Budget for the unexpected. Build in a 15–20% contingency above your estimated cost. Surprises are the norm, not the exception, and being financially prepared prevents a small issue from becoming a major problem.

Pay for quality where it matters most. Identify the one or two components that have the biggest impact on your satisfaction and invest there. Save on everything else. Spending evenly across all areas usually means overpaying in some and underpaying in others.

What Drives Home Equity Pricing

Home Equity costs are shaped by quality level, provider choice, and your location. Premium options command higher prices but do not always deliver proportionally better outcomes. Identifying where quality matters most for your situation helps you allocate your budget effectively.

The biggest pricing variable is often one that people overlook: timing. Seasonal demand, provider availability, and market conditions all influence what you will pay. When possible, flexibility on timing gives you leverage to negotiate or simply take advantage of lower-demand pricing.

Frequently Asked Questions

How much equity do I need to borrow? ▼

Most lenders require at least 15-20% equity in your home. This means your combined LTV (existing mortgage + new loan) can't exceed 80-85% of your home's value. Some lenders allow up to 90% LTV for borrowers with excellent credit (740+), but you'll pay a higher interest rate.

Is HELOC interest tax-deductible? ▼

Yes, if you use the funds to buy, build, or substantially improve your home. Interest on HELOCs and home equity loans used for home improvements is deductible on up to $750,000 of total mortgage debt. If you use the funds for other purposes (debt consolidation, tuition, etc.), the interest is generally not deductible.

What credit score do I need? ▼

Most lenders require a minimum credit score of 620-680 for a HELOC or home equity loan. For the best rates, you'll want 740+. Your score also affects your maximum LTV — borrowers with lower scores may be limited to 75-80% LTV even if the lender advertises 90%.

What are the closing costs? ▼

HELOCs typically have minimal closing costs ($0-500) — many lenders waive them entirely. Home equity loans have closing costs similar to a mortgage: 2-5% of the loan amount, including appraisal ($300-600), origination fees, title search, and recording fees. Always ask about closing costs upfront and factor them into your total cost comparison.

Rate Sources: Average HELOC rates (7.0-10.5%) and home equity loan rates (7.5-10.0%) based on Bankrate, LendingTree, and U.S. Bank published rates as of Q1 2026. LTV requirements from Bankrate lending guidelines. Tax deductibility rules per IRS Publication 936.

Related Calculators

Finance

Mortgage Payment Calculator

Home

Roof Replacement Cost

Home

Kitchen Remodel Cost

Finance

Debt Payoff Calculator