Home improvements can add real value to your property, but financing them the right way matters. If you've built up equity in your home, a home equity loan or HELOC is often the most cost-effective way to fund a renovation.
Our calculator estimates how much equity you can access, your monthly payment, and total interest costs so you can plan your project before you borrow.
Estimate how much equity you can access and what your monthly payments would be.
Home Equity Loan & HELOC Calculator
Estimate how much equity you can access and what your monthly payments would be.
Adjust your loan details and click Calculate Payments to see your results.
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Using home equity to finance home improvements
Home equity loans and HELOCs are among the most popular ways to fund renovations, and for good reason. Because the loan is secured by your home, interest rates are typically much lower than personal loans or credit cards.[1]
Home equity loan: Delivers a lump sum at a fixed interest rate, repaid over a set term. Best suited for projects with a defined scope and budget: A kitchen remodel, roof replacement, or addition where you know the total cost upfront. Your monthly payment stays the same throughout the repayment period.
HELOC: A revolving line of credit you draw from as needed, typically at a variable rate. Better suited for multi-phase projects or ongoing work where costs are spread over time. You only pay interest on what you actually draw. Use the tabs in the calculator to compare both options side by side.
Important terms to know
Current home value: Your home's estimated market value today. This determines how much equity you have available. Lenders will order their own appraisal before approving a loan.
Current mortgage balance: What you still owe on your primary mortgage. Your available equity is your home value minus this balance, subject to the lender's utilization cap.
Equity utilization cap: The maximum percentage of your home's value a lender will allow you to borrow against — including your existing mortgage. Most lenders cap this at 80–90%. At an 80% cap, a home worth $455,000 with no mortgage balance leaves roughly $364,000 in accessible equity. The cap exists to protect both the lender and the borrower against market fluctuations.
Max equity available: Your actual borrowing ceiling, calculated as (home value × utilization cap) minus your current mortgage balance. You can borrow less than this amount, and for a renovation, borrowing only what the project requires is generally the right call.
Repayment period: Home equity loans are repaid over a fixed term of 5, 10, 15, or 20 years. Shorter terms mean higher monthly payments but significantly less total interest paid. Match the term to the life expectancy of the improvement where possible.
Other home improvement financing options
Home equity products aren't the only option. Depending on your equity position and project size, other approaches may be worth considering:
Personal loans: Unsecured and faster to obtain than home equity products, but rates are significantly higher. Best for smaller projects (typically under $25,000), where you don't want to put your home up as collateral.[2]
Cash-out refinance: Replaces your existing mortgage with a new, larger one and gives you the difference in cash. It can make sense if current rates are near or below your existing rate, but adds closing costs and resets your loan term.
FHA 203(k) loan: A government-backed loan that rolls the purchase price and renovation costs into a single mortgage. Available for buyers purchasing a fixer-upper, not for existing homeowners refinancing.
How to get help with a home improvement loan
The right financing option depends on your equity position, credit score, project scope, and how long you plan to stay in the home. A mortgage professional can walk you through the trade-offs and match you with the right product.
Best Interest Financial can help. With decades of experience and over $1 billion in closed loans, their team knows how to find home equity solutions that fit your goals. Talk with a Best Interest loan officer about your options.