A home equity loan payment is determined by three variables: loan amount, interest rate, and term. The formula is a standard amortizing payment — your monthly cost stays fixed for the life of the loan, with early payments weighted toward interest and later payments toward principal.
Monthly payment formula:
$$M = P \cdot \frac{r(1+r)^n}{(1+r)^n - 1}$$
Where $P$ = loan amount, $r$ = monthly interest rate (annual rate ÷ 12), $n$ = number of monthly payments.
Home Equity Loan Payment Calculator Table
$30,000 Home Equity Loan
| Rate | 5-Year Term | 10-Year Term | 15-Year Term |
|---|---|---|---|
| 7.5% | $601/mo | $356/mo | $278/mo |
| 8.0% | $608/mo | $364/mo | $286/mo |
| 8.5% | $616/mo | $371/mo | $295/mo |
| 9.0% | $623/mo | $380/mo | $304/mo |
| 10.0% | $638/mo | $397/mo | $322/mo |
$50,000 Home Equity Loan
| Rate | 5-Year Term | 10-Year Term | 15-Year Term |
|---|---|---|---|
| 7.5% | $1,001/mo | $594/mo | $463/mo |
| 8.0% | $1,013/mo | $607/mo | $478/mo |
| 8.5% | $1,026/mo | $619/mo | $492/mo |
| 9.0% | $1,038/mo | $633/mo | $507/mo |
| 10.0% | $1,062/mo | $661/mo | $537/mo |
$100,000 Home Equity Loan
| Rate | 5-Year Term | 10-Year Term | 15-Year Term |
|---|---|---|---|
| 7.5% | $2,003/mo | $1,187/mo | $927/mo |
| 8.0% | $2,028/mo | $1,213/mo | $956/mo |
| 8.5% | $2,053/mo | $1,240/mo | $985/mo |
| 9.0% | $2,076/mo | $1,267/mo | $1,014/mo |
| 10.0% | $2,125/mo | $1,322/mo | $1,075/mo |
Worked Example: $75,000 Loan at 8.5% for 10 Years
- Monthly payment: $929
- Total paid over 10 years: $111,480
- Total interest paid: $36,480
- Interest as % of principal: 48.6%
If you shortened the term to 5 years, the monthly payment rises to $1,540 but total interest drops to $17,400 — saving $19,080 in interest at the cost of an extra $611/month.
How Much Can You Borrow?
Lenders typically cap home equity borrowing at 80–85% combined loan-to-value (CLTV):
$$\text{Max Loan} = (\text{Home Value} \times 0.80) - \text{Mortgage Balance}$$
| Home Value | Mortgage Balance | Max Loan (80% CLTV) |
|---|---|---|
| $250,000 | $150,000 | $50,000 |
| $350,000 | $200,000 | $80,000 |
| $500,000 | $300,000 | $100,000 |
| $600,000 | $250,000 | $230,000 |
Some lenders extend to 90% CLTV for borrowers with excellent credit, though rates are higher at higher LTV ratios.
2026 Home Equity Loan Rates by Credit Score
Your credit score significantly affects the rate you qualify for:
| Credit Score | Estimated Rate Range |
|---|---|
| 760+ | 7.5%–8.0% |
| 720–759 | 8.0%–8.75% |
| 680–719 | 8.75%–9.5% |
| 640–679 | 9.5%–10.5% |
| Below 640 | May not qualify or 11%+ |
Improving your credit score before applying can meaningfully reduce the rate — moving from 680 to 720 on a $75,000 loan could save $25–$40/month.
Home Equity Loan vs. HELOC: Which Is Cheaper?
| Factor | Home Equity Loan | HELOC |
|---|---|---|
| Rate type | Fixed | Variable (usually prime + margin) |
| Draw structure | Lump sum | Revolving credit line |
| Best for | One-time expense | Ongoing or uncertain costs |
| Current typical rate | 7.5%–10.5% | 8.0%–11.0% |
| Monthly payment | Fixed | Varies during draw period |
| Rate risk | None (fixed) | Rises with prime rate |
If rates are likely to fall, a HELOC offers the advantage of lower payments over time. If you need certainty and predictability — especially for home renovation projects — a fixed home equity loan eliminates payment uncertainty.
When Does a Home Equity Loan Make Sense?
Home equity loans work best when:
- You need a specific, defined amount (not an ongoing credit line)
- You want a fixed payment you can budget around
- You’re using proceeds for home improvements that build value (and potentially qualify for the interest deduction)
- Your alternative is high-rate credit card debt (8.5% beats 22% card APR significantly)
They carry real risk: your home is the collateral. If you can’t make payments, you can lose your home. Only borrow what you have a clear plan to repay.
For more on tapping home equity, see the HELOC guide, best HELOC lenders, and home equity loan vs HELOC comparison.
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