Kentucky Home Equity Loan Calculator

By SoFi Editors | Updated December 18, 2025

For Kentucky homeowners, the equity you build up in your property is more than a measure of ownership — it’s a potent financial asset. A home equity loan can unlock funds based on your equity, and a home equity loan calculator can help you determine how much you might borrow and what the monthly payments would be. This guide will walk through the mechanics of a home equity loan calculator and provide a detailed explanation of how home equity loans work. Let’s explore how to get equity out of your home and see how the calculator can be of help.

  • Key Points
  • •   Home equity loans provide a lump-sum loan with your home used as collateral.
  • •   Home equity loans typically come with fixed interest rates, which means monthly payments remain the same over the life of the loan.
  • •   Eligibility for a home equity loan is influenced by your equity level, credit score and debt-to-income (DTI) ratio.
  • •   The interest paid on a home equity loan may be tax-deductible.
  • •   Comparing loan offers from multiple lenders can save you money, as even a small difference in interest rates can lead to substantial savings.

Calculator Definitions

•   Home Value: This is the property’s current estimated market value, which may be different from the price you originally paid for it. This figure (find it on a real estate site) reflects what your home is worth in today’s real estate market.

•   Desired Loan Amount: This is the sum of money that you intend to borrow.

•   Current Mortgage Balance: For the purposes of this calculator, the total outstanding amount you owe on all existing home loans secured by your home, including your primary mortgage, is your mortgage balance.

•   Home Equity Loan Repayment Term: This is the designated time frame for repaying the loan in full. Repayment terms for a home equity loan typically range from five to 30 years.

•   Interest Rate: The loan’s interest rate is a percentage of whatever amount you borrow and ultimately determines the cost of borrowing the money.

•   Maximum Loan Amount: This is the highest amount a lender might be willing to offer you based on your equity.

•   Estimated Monthly Payment: This is the consistent, recurring payment you will make to repay the loan’s principal and interest over the agreed-upon term.

•   Available Equity Amount/Percentage: The home equity calculator shows your equity both in dollars and as a percentage of your home’s current value. You’ll need to maintain at least 15% equity as a protective cushion, so you won’t be able to borrow 100% of your home equity.

Recommended: What Is a Home Equity Line of Credit?

How to Use the Kentucky Home Equity Loan Calculator

By running the numbers in this calculator before committing to a lender and loan, you can set realistic expectations and see how a second mortgage payment might fit into your budget.

Step 1: Enter Your Home Value

Type in or use the slider to indicate the current estimated market value of your home.

Step 2: Input Your Desired Loan Amount

Choose the specific amount of money you need for your project or financial goal. This allows the calculator to generate an estimated monthly payment.

Step 3: Enter Your Current Mortgage Balance

Provide the outstanding balance of your current mortgage and any other loans secured by the property.

Step 4: Select a Home Equity Loan Repayment Term

Select a repayment period, keeping in mind that terms typically range from five to 30 years. A shorter term means a higher monthly payment but less interest paid over the life of the loan.

Step 5: Estimate Your Interest Rate

Enter an estimated interest rate, perhaps a rate you have seen online or received in a quote from a lender. The actual interest rate you receive will be determined by a lender based on your credit history and financial profile.

Step 6: Review Your Results

The calculator will provide your estimated monthly payment and maximum loan amount. It serves as a home equity calculator and will tell you your available equity amount in dollars and as a percentage, important information on your way to a loan.

What Is a Home Equity Loan?

The calculator has quickly shown you what might be possible as you consider borrowing against your home equity. The next step is to make sure you understand precisely what a home equity loan is. Technically, a home equity loan is a second mortgage because it is secured by your property. This means that if you don’t make your loan payments, you risk foreclosure.

The loan provides a one-time lump sum of cash at closing. The repayment structure is straightforward and predictable. These loans are repaid in fixed monthly installments that cover both the principal and interest. You repay the loan over a predetermined term, which typically ranges from five to 30 years. You’ll start making payments as soon as you receive the funds. The consistent monthly amount makes it easy to budget for the new payment alongside your primary mortgage. A home equity payment calculator helps you see what the payment amount might be.

Because the loan is secured by your home, it generally offers a lower interest rate compared to unsecured forms of debt, such as personal loans or credit cards. This can make it an attractive option for financing large, one-time expenses.

A homeowner’s equity is not a static figure; it is influenced by both broad market dynamics and personal actions — primarily those mortgage payments you’ve been making. Average equity levels in the state more than doubled from 2020 to 2025, and the average Kentucky homeowner now has about $60,000 in home equity. This is in large part due to a rise in home values. The median sale price of a home in Louisville, the state’s largest city, increased from $205,000 in the fall of 2020 to $265,000 in late 2025, according to Redfin. Every mortgage payment you make includes a portion that pays down the loan’s principal, systematically building your ownership stake. Take a look at how equity has increased in the U.S. as a whole in recent years.

How to Use the Home Equity Loan Calculator Data to Your Advantage

The outputs from a home equity loan calculator can guide your financial planning. Consider these ways to use this data strategically:

By examining the Estimated Monthly Payment provided by the home equity loan payment calculator, you can determine how a new loan payment would fit into your existing budget. This is a critical step to prevent overextending yourself. If the payment estimate feels like it would leave you pinched, you can try reducing the loan amount to see the impact.

The Maximum Loan Amount gives you the lowdown on how much equity you might harness. This estimate will be useful if you are planning large-scale projects, such as a major renovation. Try to avoid borrowing more than you need, though — you’ll be paying interest on the full amount even if you don’t use the entire loan immediately.

Finally, try modeling different loan terms with the home equity payment calculator to see how this affects your payment amount. For example, compare a 10-year repayment term to 20-year one. This will clearly illustrate for you the fundamental trade-off between lower monthly payments and higher total interest costs.

Home Equity Loan Scenarios

Hypothetical examples can help clarify the practical implications of taking out a home equity loan. Check out these sample scenarios.

Scenario 1: Funding a Major Home Improvement Project

Imagine a homeowner in Kentucky who wants to complete a full kitchen remodel with a cost of $50,000. They have sufficient equity in their home and a stable income. By taking out a fixed-rate home equity loan for this amount, they receive the full $50,000 in a lump sum. This allows them to pay their contractor and purchase materials without worrying about depleting their emergency fund or maxing out a credit card (or both). Because the loan has a fixed interest rate and a set repayment term, their monthly payment is predictable.

Scenario 2: Consolidating High-Interest Debt

Consider another homeowner who has accumulated $25,000 in high-interest debt across three credit cards. The variable interest rates make the monthly payments unpredictable and costly.They secure a $25,000 home equity loan and pay off all their credit card balances at once. Now they have one monthly payment instead of three, and it’s at a lower, fixed interest rate — so the payment amount is steady and predictable. As long as the homeowner can avoid accumulating new high-interest debt now that their card balances are cleared, this should be a successful debt consolidation.

Tips on Home Equity Loans

Approaching a home equity loan with a clear strategy is essential to ensuring it serves your financial goals without creating undue risk. Use these tips to guide you:

•  Prepare to apply. A strong credit score (680 or better) and a debt-to-income ratio below 50% will help you qualify, so check your numbers before you apply.

•  Shop around. Don’t accept the first loan offer you receive. Compare interest rates and fees from multiple lenders and use the calculator to estimate monthly payments.

•  Understand the costs. Be aware that home equity loans come with closing costs, which can include fees for the appraisal, title search, and loan origination. These costs typically range from 2% to 5% of the total loan amount.

•  Borrow wisely. Use the funds for purposes that can provide long-term financial value. Home improvements that increase your property’s worth are an excellent example, as you are reinvesting the money back into your primary asset.

•  Confirm affordability. Before signing any documents, carefully assess your budget. Ensure that the new loan payment, when added to your primary mortgage and other monthly expenses, is manageable and does not put a strain on your finances.

While a home equity loan is a strong option for many, it’s wise to consider all available financing tools before making a final decision.

Recommended: HELOC vs. Home Equity Loan

Alternatives to Home Equity Loans

While there aren’t different types of home equity loans, there are different ways to borrow against your equity, as well as loans that don’t require you to use your home as collateral. If a home equity loan doesn’t quite suit your needs, consider these options:

Home Equity Line of Credit (HELOC)

A HELOC is a revolving line of credit secured by your equity. In practice, it functions similarly to a credit card. It has a “draw period” where funds can be borrowed as needed up to a set limit. During this time, you pay interest only on the amount you have borrowed. A HELOC interest-only calculator can show you what those payments might be.

After the draw phase is a “repayment period” where you pay both the principal and interest. The payment will be larger then, and a HELOC repayment calculator can show you how that might look. HELOCs typically have variable interest rates, meaning payments can change over time.

Home Improvement Loan

A home improvement loan is a type of unsecured personal loan specifically intended for renovation projects. Because it is unsecured, your home is not used as collateral, eliminating the risk of foreclosure. While funding can be faster, interest rates may be higher, and loan amounts are often smaller compared to a home equity loan.

Personal Line of Credit

A personal line of credit is an unsecured, revolving line of credit. It functions similarly to a HELOC but is not secured by your property. Because this credit line doesn’t require collateral, it often has a higher interest rate and a lower credit limit than a HELOC.

Cash-Out Refinance

A cash-out mortgage refinance involves replacing your current mortgage with a new, larger loan. The difference between the new loan amount and your old mortgage balance is given to you in cash. In the cash-out refinance vs. home equity line of credit or home equity loan comparison, it’s important to consider that a refinance leaves you with one monthly loan payment instead of two. However, if you have a sweet interest rate on your current home loan, it might not make sense to refinance. Run the numbers to be sure.

The Takeaway

A Kentucky home equity loan calculator will help you estimate your borrowing power, project your monthly payments, and understand the financial implications of a home equity loan before you commit. By using it to model different scenarios, you can approach lenders with a clear and realistic understanding of what you can afford and make the best decision about borrowing.

SoFi now offers home equity loans. Access up to 85%, or $750,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.



Unlock your home’s value with a home equity loan from SoFi.


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FAQ

What is the typical loan term for a home equity loan?

The repayment term for a home equity loan can be anywhere from five to 30 years. The term you choose will impact your monthly payment amount and the total interest you pay over the life of the loan. Use a home equity loan payment calculator to experiment with the effect of different terms on the monthly payment amount.

What are the qualification requirements for a home equity loan?

To qualify for a home equity loan, homeowners generally need to have at least 20% equity in their home. Lenders also look for a good credit score, a manageable debt-to-income ratio, and a history of steady, verifiable income to approve an application.

Are there closing costs or fees with home equity loans?

Home equity loans usually come with closing costs. These fees can range from 2% to 5% of the total loan amount and may include charges for an appraisal and title search, plus document preparation and loan origination fees.

Does a home equity loan replace my first mortgage?

A home equity loan does not replace your first mortgage. It is a separate, additional loan — technically, a second mortgage. This means you will have two monthly payments: one for your original mortgage and one for the new home equity loan.

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