Minnesota Home Equity Loan Calculator

By SoFi Editors | Updated December 18, 2025

For Minnesota homeowners, a home equity loan can allow homeowners access to the equity they’ve built in their homes. This can be used to fund a major home renovation, consolidate debt, or cover a significant one-time expense.

A Minnesota home equity loan calculator can help you estimate your maximum borrowing amount and potential monthly payments. It’s the essential first step in understanding your financial position and borrowing potential.

Keep reading to learn more on home equity loans, how to use the Minnesota home equity loan calculator, alternatives to home equity loans, and more.

  • Key Points
  • •  A home equity loan provides funds as a single, lump-sum payment based on the equity you have in your home.
  • •  A Minnesota home equity loan calculator helps compare different loan options and their long-term costs.
  • •  Loan eligibility is influenced by your credit history and debt-to-income ratio.
  • •  Home equity loans typically have fixed interest rates, which results in consistent monthly payments throughout the loan’s term.
  • •  Repayment of both principal and interest begins immediately after you receive the funds.

Calculator Definitions

•  Home Value: This is the current estimated market value of your property. It is important to use a realistic, up-to-date value, not the original purchase price.

•  Desired Loan Amount: This is the total sum of money you intend to borrow. This figure should reflect your specific financial need, such as the projected cost of a renovation project or the total of debts you wish to consolidate.

•  Current Mortgage Balance: This figure represents the total amount still owed on your primary home loan, plus the balances of any other existing loans secured by your home, such as a prior home equity loan or HELOC.

•  Home Equity Loan Repayment Term: This is the length of time over which you will repay the loan. Home equity loan terms typically range from five to 30 years.

•  Interest Rate: This is the cost of borrowing the money, expressed as a percentage. For most home equity loans, this is a fixed rate that will not change over the life of the loan.

•  Maximum Loan Amount: This is the highest amount a lender is likely to offer, calculated based on the inputs you provide for your home’s value and mortgage balance.

•  Estimated Monthly Payment: This is the calculated amount you will be required to pay each month. This payment includes both a portion of the principal loan amount and the interest charges.

•  Available Equity Amount: This is the portion of your home’s equity a lender is willing to finance. It is calculated by subtracting your total mortgage debt from the home’s appraised value and then applying the lender’s maximum combined loan-to-value (CLTV) ratio, which is often around 85%.

How to Use the Minnesota Home Equity Loan Calculator

Using a Minnesota home equity loan calculator is a straightforward process that empowers homeowners to estimate their borrowing potential and understand the financial implications of taking on a second mortgage. The following steps will guide you through inputting your information correctly to generate an estimate.

Step 1: Enter Your Home Value

Begin by inputting the current estimated market value of your home. This figure serves as the foundation of the entire calculation, as it establishes the total asset value against which the loan is secured and determines the total equity available.

Step 2: Input Your Desired Loan Amount

Next, enter the specific amount of money you wish to borrow. This allows the calculator to generate a monthly payment and helps you assess whether your desired loan amount is feasible within your budget and the lender’s potential limits.

Step 3: Type in Your Current Mortgage Balance

Enter the outstanding balance on your primary mortgage and any other loans secured by your property. This step is critical because it allows the calculator to subtract your existing debt from your home’s value, which determines the amount of equity you have available to borrow against.

Step 4: Select a Home Equity Loan Repayment Term

Select your preferred loan term, which can range from five to 30 years. This choice has a direct relationship with your monthly payment; longer terms result in lower monthly payments but may lead to paying more in total interest over the life of the loan.

Step 5: Estimate Your Interest Rate

Enter an estimated interest rate. This rate is influenced by current market conditions as well as personal financial factors, such as your credit history and income. Testing different rates can help you understand how your borrowing costs might change based on the offer you ultimately receive.

Step 6: Review Your Results

The calculator will provide two primary results: the estimated monthly payment for your desired loan amount and the maximum potential loan amount you might qualify for. These outputs give you a clear picture of both affordability and borrowing capacity.

What Is a Home Equity Loan?

A home equity loan is a type of second mortgage that allows homeowners to borrow against the equity they have built in their property, though you will likely need at least 20% equity to qualify. It functions as a secured loan, using the home itself as collateral. The loan provides a one-time lump sum of cash, which is then repaid in predictable, equal monthly installments at a fixed interest rate over a set term, typically between five and 30 years.

Advantages of a Home Equity Loan

•  Competitive interest rates: Because the loan is secured by your home, lenders view it as lower risk. As a result, interest rates are typically lower than those for unsecured debt like personal loans or credit cards.

•  Fixed payments: The fixed interest rate ensures that your monthly payment remains the same for the entire life of the loan. This predictability makes it easier to budget and manage your finances over the long term.

•  Substantial loan amounts: Depending on your available equity, you can often access a large amount of cash at once. This makes home equity loans well-suited for covering major expenses, such as a significant home remodel or college tuition.

•  Flexible use: The funds from a home equity loan can be used for a wide range of purposes. Common uses include home improvements, debt consolidation, medical expenses, and other large purchases.

Disadvantages of a Home Equity Loan

•  Home as collateral: This is the most significant risk. Because the loan is secured by your property, failure to make payments on time can put your home at risk of foreclosure by the lender.

•  Increased debt load: A home equity loan is a second mortgage, which means you become responsible for two separate housing-related payments each month — one for your primary mortgage and one for the new loan.

•  Closing costs: These loans often come with closing costs, which can range from 2% to 5% of the total loan amount. These fees cover expenses such as the home appraisal, title search, and loan origination fees.

Understanding these benefits and risks is essential before deciding if a home equity loan is the right choice for your financial goals.

Recommended: What Is a Home Equity Loan?

As home values have risen over the last five years, so have homeowner equity levels. In fact, equity levels have doubled since 2020, a collective increase of $5.7 trillion (see chart below). About half of homeowners with a mortgage are considered “equity rich,” which means their mortgage balance is less than 50% of the home’s value.

In Minnesota, equity levels increased 53% over the same period, with the average home equity level per homeowner currently $135,554. This could be why there is so much interest around how to get equity out of your home.

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

The outputs from a home equity loan calculator provide data that enables strategic financial planning. Here’s how to use this data to your advantage:

•  Budgeting with confidence: The estimated monthly payment figure is the most direct measure of affordability. This allows you to determine if you can comfortably manage the new debt alongside existing financial obligations.

•  Planning major projects: The maximum loan amount provides a realistic ceiling for large-scale projects, such as a home renovation. Knowing this limit prevents you from designing a project that is beyond your borrowing capacity, helping you align your plans with your financial reality from the outset.

•  Comparing loan scenarios: The calculator’s flexibility allows you to adjust inputs like the loan term and the desired loan amount. You can run multiple scenarios to find the optimal balance between securing the funds you need and maintaining an affordable monthly payment.

***Recommended:******HELOC vs. Home Equity Loan***

Home Equity Loan Scenarios

Here are two common scenarios where homeowners might leverage their property’s value to achieve specific financial goals.

Scenario 1: Funding a Major Home Remodel

Imagine a homeowner planning a comprehensive kitchen renovation with an estimated cost of $40,000. By securing a home equity loan for this amount, they receive the full sum upfront, allowing them to pay contractors and purchase materials without delay. The loan’s fixed interest rate and consistent monthly payments provide a stable and predictable repayment plan that can be integrated into their household budget over the loan’s term.

Scenario 2: Consolidating High-Interest Debt

Consider a homeowner with multiple high-interest debts that have become difficult to manage. They could take out a home equity loan to pay off all these balances in full. This strategy replaces multiple, variable-rate payments with a single, fixed monthly payment, often at a significantly lower interest rate.

Tips on Home Equity Loans

Securing a home equity loan is a significant financial decision that requires careful consideration and planning. The following tips can help you navigate the process effectively and ensure you find a loan that aligns with your financial well-being.

•  Compare offers from multiple lenders: Do not accept the first offer you receive. Shop around and compare rates, terms, and fees from different banks, credit unions, and online lenders. Even a small difference in the interest rate can result in significant savings over the life of the loan.

•  Understand all costs: Look beyond the interest rate. To mitigate the risk of unexpected fees, which can range from 2% to 5% of the loan amount, carefully review the loan estimate provided by the lender. This document details all associated closing costs and fees, such as for appraisal, origination, and title searches.

•  Strengthen financial standing: Before applying, take steps to improve your financial profile. This includes maintaining a strong credit score by paying bills on time and managing your debt-to-income (DTI) ratio. A better financial standing can help you qualify for more favorable loan terms.

•  Borrow only what is needed: Lenders may approve you for a maximum loan amount, but that doesn’t mean you should take it all. To avoid the disadvantage of an increased debt load and keep your monthly payments manageable, borrow only the amount you truly need to achieve your goal.

• \ Prioritize value-adding uses: While you can use the funds for any purpose, using a home equity loan for investments that can increase your property’s value, such as a significant home improvement project, is often a wise financial move.

Alternatives to Home Equity Loans

While there aren’t different types of home equity loans, there are other options for accessing funds. The following alternatives are worth considering as you evaluate the best path forward for your situation.

Home Equity Line of Credit (HELOC)

A home equity line of credit (HELOC) is a revolving line of credit secured by your home, functioning much like a credit card. Instead of receiving a lump sum, you can draw funds as needed up to a set limit. HELOCs typically have a variable interest rate and are structured with a “draw period,” during which you can borrow money, followed by a “repayment period,” where you pay back the principal and interest.

A HELOC interest-only calculator can calculate what your payments might be during the initial period. To determine your principal plus interest amount during the subsequent repayment period, you can use a HELOC repayment calculator.

Home Improvement Loan

A home improvement loan is a type of unsecured personal loan. Because it is not secured by your home, the risk of foreclosure is eliminated, but this often results in higher interest rates, shorter repayment terms, and lower borrowing limits compared to a home equity loan.

Personal Line of Credit

A personal line of credit is another form of unsecured, revolving credit. Unlike a home equity loan or personal loan, which provide a lump sum, it offers flexible access to funds. Unlike a HELOC, it is not secured by your home, which eliminates foreclosure risk but typically results in higher interest rates and lower borrowing limits.

Cash-Out Refinance

A cash-out mortgage refinance replaces your existing primary mortgage with a new, larger one, and you receive the difference between the two loan amounts in cash. This is an attractive option if you can secure a lower interest rate than on your existing mortgage.

When comparing a cash-out refinance vs. home equity line of credit, a home equity line of credit adds a second monthly payment, whereas a cash-out refinance results in a single, consolidated mortgage payment.

The Takeaway

The Minnesota home equity loan calculator serves as a first step in securing a home equity loan. By providing essential estimates for affordability and borrowing power, it enables homeowners to approach the decision with a clear and realistic understanding of the potential financial commitment involved.

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

How is a home equity loan different from a home equity line of credit (HELOC)?

A home equity loan provides a single lump sum of money at a fixed interest rate, with repayment of principal and interest beginning immediately. In contrast, a HELOC is a revolving line of credit with a typically variable interest rate, allowing you to draw funds as needed during a set “draw period” and repay only what you borrow.

How much can I borrow with a home equity loan?

The amount you can borrow depends on your home’s market value, outstanding mortgage balance, credit history, and income. While 85% of your combined loan-to-value ratio is a common cap, it can vary by lender and your qualifications.

What can I use home equity loan money for?

The funds from a home equity loan are flexible and can be applied to a wide variety of purposes. Common uses include major home improvements, consolidation of higher-interest debts like credit cards, funding education expenses, and covering other large, one-time purchases or financial emergencies.

Is the interest rate on a home equity loan fixed or variable?

Home equity loans almost always come with a fixed interest rate. This means the rate does not change over the entire repayment term, which results in predictable and consistent monthly payments for the life of the loan, making it easier to budget.

What are the typical loan terms for a home equity loan?

Home equity loans offer a variety of repayment terms to fit different financial situations and budgets. These terms typically range from as short as five years to as long as 30 years, allowing borrowers to choose between a lower monthly payment with a longer term or paying off the loan faster with a shorter term.

What are the qualification requirements for a home equity loan?

Lenders generally require homeowners to have at least 20% equity. They will also assess your financial health, typically requiring a credit score of 620 or higher, a steady income, and a debt-to-income (DTI) ratio below 50%.

Are there closing costs or fees with home equity loans?

Yes, home equity loans typically have closing costs that can range from 2% to 5% of the total loan amount. These fees cover expenses such as the home appraisal, title search, origination fees, and other administrative costs associated with processing and finalizing the loan.

Does a home equity loan replace my first mortgage?

No, a home equity loan does not replace your first mortgage. It is a second mortgage, which means it is a separate, additional loan taken out against your home’s equity. You will be responsible for making two separate monthly payments: one for your original mortgage and one for the new home equity loan.

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