What home equity is
Your equity is the part of your home you own outright: its current value minus what you still owe on your mortgage. A £300,000 home with a £200,000 mortgage has £100,000 of equity.
You can borrow against that equity with a further advance from your mortgage lender, a remortgage, or a separate loan secured on your home (a second charge). Lenders usually cap the total borrowing at a percentage of the home's value.
Worked example
Borrowing £40,000 against your equity at 7.5% over 10 years costs £474.81 a month. You'd repay £56,976.85 in total, including £16,976.85 of interest.
The calculator works interest out monthly. A further advance, remortgage or second charge may use a different method, so rely on the figures in your offer.
Before you borrow against your home
Borrowing against your equity is secured on your home, so falling behind with payments puts the home at risk.
Compare the total cost with other options. A longer term lowers the monthly payment but increases the interest you pay overall.
What this calculator assumes
The calculator treats the equity borrowing as a single loan on one nominal rate for the whole term, repaid in equal monthly payments, with interest worked out monthly at one twelfth of the annual rate. This page prices the loan only. To see how much equity you could borrow, use the home equity loan value calculator.
It leaves out valuation and legal fees, early repayment charges and changes in your home's value, so treat the result as a guide for comparing options rather than an offer.
Inputs for the equity calculator
Amount to borrow
How much you want to borrow against your home's equity.
Interest rate (per year)
The annual interest rate on your loan. The rate shown is only an example, so enter the rate from your quote.
Term
How many years you'll repay over.
CALCULATOR QUESTIONS
Home equity loan calculator questions
How do I work out my home equity?
Take your home's current value and subtract the mortgage balance. For example, £300,000 minus £200,000 leaves £100,000 of equity.
How much equity can I borrow?
It depends on the lender. They usually limit total borrowing, including your mortgage, to a percentage of the home's value, and check that you can afford the repayments.
Is borrowing against equity the same as a second mortgage?
A separate loan secured on your home is often called a second mortgage or second charge. You can also borrow through a further advance or a remortgage.
What's the risk?
Because the loan is secured on your home, missing payments can lead to repossession. Borrow only what you can comfortably repay.