Most lenders qualify you based on the following home equity loan requirements:
- Maximum debt-to-income (DTI) ratio: 43%
- Minimum credit score: 620
- Maximum LTV ratio: 85%
Written by Denny Ceizyk | Edited by Crissinda Ponder | Updated on September 22, 2023
You can calculate your home’s equity by subtracting your current loan balance from what you think your home is worth. Our home equity loan calculator does the extra math to determine how much of that equity can be used for a home equity loan.
You only need three pieces of information to start crunching numbers:
A note about your maximum loan amount: Our calculator limits you to an 85% loan-to-value (LTV) ratio, the industry standard set by most home equity lenders. That means the balance of both your current mortgage and new home equity loan can’t exceed 85% of your home’s value. However, some specialized home equity lenders let you borrow up to 100% of your home’s value.
Our home equity loan calculator does the math for you. If you prefer to run the numbers yourself, here’s the formula we use:
LOAN AMOUNT |
APR AS LOW AS |
|
$25,000 |
6.63% |
|
$50,000 |
6.63% |
|
$100,000 |
6.88% |
|
$150,000 |
6.88% |
A home equity loan is a type of second mortgage that allows you to borrow against the equity you’ve built in your home. The term “second mortgage” simply means it’s attached to a home already secured by a first mortgage.
Home equity loans are similar to regular mortgages. Lenders qualify you based on your income and credit scores and verify your home’s value with a home appraisal.
You receive all your money as a lump sum and make monthly installment payments, just like a regular mortgage. A lien is secured against your home and is released once you pay your loan off.
Some standard features of home equity loans include:
Learn more about how a home equity loan works.
Once you’ve used the home equity loan calculator to get a rough idea of how much of your home equity you can borrow, follow these five steps to get one:
| Lender | LendingTree rating and "best of" category | Available features | Lender review |
|---|---|---|---|
|  Low credit scores | 680 minimum credit score 90% LTV with higher score $45K minimum draw | Read our review |
|  High LTV ratios | 5- to 30-year terms No-closing-cost options 100% LTV for qualified borrowers | Read our review |
|  Online experience | 5- to 30-year terms $10K to $500K loan amounts 0.25% rate discount for eligible borrowers | Read our review |
| Rate and closing cost discounts | 5- to 30-year terms 0.50% rate discount for eligible borrowers No upfront fees | Read our review |
| Fast closings | 5- to 30-year terms $500K maximum loan amount 14-day closings possible | Read our review |
Most lenders qualify you based on the following home equity loan requirements:
In most cases, you’ll spend 2% to 5% of your home equity loan amount toward closing costs.
If you don’t have enough home equity for a loan now, try these three steps to help you build equity in your home:
It takes roughly two to four weeks to complete a home equity loan.