Tennessee Home Equity Loan Calculator

By SoFi Editors | Updated December 23, 2025

A home equity loan is a powerful financial tool allowing you to convert a portion of your home’s equity into a lump sum of cash to fund significant expenses. This home equity loan guide is designed to provide a comprehensive understanding of how the Tennessee home equity loan calculator works as a planning tool. We will explore how a home equity loan works, factors that influence eligibility and rates, and how you can strategically use the tool to navigate the world of home equity loans with confidence.

  • Key Points
  • •  A home equity loan provides funds as a single, lump-sum payment based on the equity you have in your home.
  • •  A borrower’s credit score and debt-to-income ratio are important factors for lenders to determine eligibility and loan terms.
  • •  Use the Tennessee home equity loan calculator to experiment with a variety of inputs without making a formal commitment.
  • •  Home equity loans typically have fixed interest rates, which means your monthly payments will remain the same throughout the loan’s term.
  • •  Repayment terms for home equity loans generally range from five to 30 years.
  • •  Alternatives to a home equity loan include a home equity line of credit, a home improvement loan, personal line of credit, and cash-out refinance.

Calculator Definitions

•  Home Value: The home value is the current estimated market value of your property, not the original purchase price.

•  Desired Loan Amount: The desired loan amount is the principal amount that will be repaid over the loan term. You can input this amount (or use the slider), and you will see this figure appear in the calculator as a result.

•  Current Mortgage Balance: This is the total outstanding amount you owe on your primary home loan. For an accurate calculation, you must also include the balances of any other existing loans secured by the property, such as a home equity loan or HELOC.

•  Home Equity Loan Repayment Term: This is the length of time over which you will repay the loan, typically between five and 30 years. The term you select will directly affect the size of your monthly payment.

•  Interest Rate: Interest, expressed as a percentage, is the cost of borrowing money. For a home equity loan, the interest rate is typically fixed for the duration of the loan.

•  Maximum Loan Amount: This represents an estimate of the highest amount a lender might offer based on your available equity and financial profile. It may be tempting; however, you do not have to borrow the maximum loan amount offered.

•  Estimated Monthly Payment: This is the calculated amount, including both principal and interest, that you would pay each month. This payment remains constant until the loan is fully repaid.

•  Available Equity Amount/Percentage: The available equity amount represents the amount you can potentially borrow against. Basically, it is the portion of your home’s value that you own outright, and it’s calculated by finding the difference between your home’s market value and your current mortgage balance.

How to Use the Tennessee Home Equity Loan Calculator

A Tennessee home equity loan calculator is an indispensable financial planning tool that can demystify the borrowing process. Here are the steps to use the calculator effectively:

Step 1: Enter Your Home Value

Begin by inputting the current market value of your home. This is the estimated price your home would sell for today, not what you originally paid for it.

Step 2: Input Your Desired Loan Amount

Enter the total lump sum you intend to borrow. Since home equity loans are well-suited for fixed-cost projects, you should have a clear idea of the amount you need.

Step 3: Choose Your Current Mortgage Balance

Provide the total outstanding balance of your primary mortgage and any other loans secured by your home. This is critical for calculating your available equity.

Step 4: Select a Home Equity Loan Repayment Term

Select a repayment period, which typically ranges from five to 30 years. Remember that a longer term will result in lower monthly payments but will cause you to pay more in total interest over the life of the loan.

Step 5: Estimate Your Interest Rate

Input an estimated interest rate. The actual rate a lender offers will be heavily influenced by your credit history, income, and overall financial standing, but using a current market average can provide a realistic estimate.

Step 6: Review Your Results

The calculator will generate an estimated monthly payment and the maximum loan amount you might qualify for. These figures are helpful for budgeting and planning, but remember they are estimates until you receive a formal offer from a lender.

What Is a Home Equity Loan?

A home equity loan is a financial tool that functions as a second mortgage, allowing homeowners to borrow against the equity they have built in their property. Having an understanding of what a home equity loan is, including the benefits and the risks, will help you determine whether this option is the right fit for your goals and finances.

Basically, a home equity loan converts your ownership stake into a usable, lump sum of cash that can be used for nearly any purpose. Many homeowners opt to fund major projects like home renovations or repairs. The funds can also go toward high-interest debt consolidation. The loan is secured by your home, which serves as collateral for the lender. This is also a risk; if you fail to make timely payments, you could face foreclosure proceedings.

Some of the key characteristics of the home equity loan are:

•  Lump-sum disbursement: Upon closing, you receive the entire loan amount in a single, upfront payment.

•  Fixed interest rate: The vast majority of home equity loans come with a fixed interest rate. This ensures your monthly principal and interest payments will not change for the entire duration of the loan, providing stability and predictability for your budget.

•  Defined repayment term: The loan must be repaid over a specific period, typically between five and 30 years, through predictable and consistent monthly installments.

•  Lower interest cost: Because your home secures the loan, lenders often offer significantly lower interest rates, making it a more affordable way to borrow large sums of money.

Recommended: What Is a Home Equity Line of Credit?

As home values have risen nationwide over the last five years, so have homeowners’ equity levels. Since 2020, equity levels have doubled, with a collective increase of $5.7 trillion (see chart). In fact, about half of homeowners with a primary mortgage have a mortgage balance less than half of the home’s value—making them “equity rich.”

Homeowners in Tennessee are benefitting from this surge in home equity with an average equity level increase of 105% over the same period. The average home equity per homeowner is just above $112,000.

As you explore how to get equity out of your home, it’s helpful to monitor this market trend.

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

The data from the Tennessee home equity loan calculator allows homeowners to assess affordability, set realistic goals, and plan effectively before committing to a loan. First, refer to the estimated monthly payment, which helps determine if you can comfortably manage the new debt alongside existing financial obligations. Next, understanding your maximum loan amount provides a realistic ceiling for large-scale projects, helping you align your project scope with what you can affordably borrow.

Finally, experimenting with different repayment terms reveals the trade-off between short-term cash flow and long-term cost. A shorter term means higher monthly payments but less interest paid overall, while a longer term offers lower payments at a greater total cost. Using the Tennessee home equity loan calculator to its fullest can help you locate a balance between securing the funds you need and maintaining a repayment schedule that’s within your budget.

Home Equity Loan Scenarios

To get the most out of our Tennessee home equity loan calculator, you can apply it to real-world examples. Here are two scenarios:

Scenario 1: Home Remodeling Project

A homeowner has been dreaming of undertaking a kitchen renovation with a fixed cost of $50,000. They apply for a home equity loan and, once approved, receive the full amount in a lump sum. This allows them to pay their contractor and purchase materials without delay. By choosing a 10-year repayment term for example, they secure a predictable and consistent monthly payment that fits into their budget. Because the renovation is a single, fixed-cost project, the lump-sum works well, eliminating the temptation to overspend that can come with a revolving line of credit.

Scenario 2: Debt Consolidation

Another homeowner is juggling high-interest debt spread across multiple credit cards, totaling $25,000. They take out a home equity loan and use the funds to pay off all their credit card balances immediately, stopping the cycle of compounding interest. Now, instead of managing multiple payments with variable rates, they have a single, fixed monthly payment. Additionally, they have swapped out high-interest, unsecured credit card debt for lower-interest, secured home equity debt.

Tips on Home Equity Loans

Securing a home equity loan is a significant financial decision that requires careful preparation. By taking steps to strengthen your financial profile, you can increase your chances of approval, qualify for more competitive interest rates, and manage the loan responsibly. Here are some tips:

•  Maintain a strong credit profile: A strong credit profile will attract competitive loan offers including lower interest rates. Pay bills on time, keep your credit card balances low, and monitor your credit report.

•  Understand your debt-to-income ratio: Your DTI compares total monthly debt payments to gross monthly income. Lenders typically want to see a lower ratio (below 50% is a common guideline, with a ratio below 36% being ideal).

•  Borrow only what you need: It may be tempting to borrow the maximum amount offered, but you don’t have to. Avoid taking on unnecessary debt.

•  Compare offers from multiple lenders: Try not to accept the first offer you receive. Shop around with different banks and credit unions to compare interest rates, fees, and loan terms first. This could lead to substantial savings over the life of the loan.

•  Be aware of the risks: Remember that a home equity loan uses your home as collateral. Therefore, if you fail to make your payments for any reason, the lender has the right to foreclose on your property.

Alternatives to Home Equity Loans

While a home equity loan is a useful financial tool, it is not the right fit for every situation. There are other options available for accessing funds, each with its own unique structure, benefits, and drawbacks. Here are some alternatives:

Home Equity Line of Credit (HELOC)

A home equity line of credit (HELOC) functions like a credit card that is secured by your home. Instead of a lump sum, it provides a revolving line of credit that you can draw from as needed during a set “draw period.” HELOCs typically have variable interest rates, and payments during the draw period are often interest-only, which can make them a flexible option for ongoing projects with uncertain costs.

Some helpful tools to have at your disposal are the HELOC interest-only calculator, which determines what your payments might be during the draw period. Also, a HELOC repayment calculator can help you figure out your principal plus interest amount during the repayment period.

Recommended: HELOC vs. Home Equity Loan

Home Improvement Loan

A home improvement loan is a type of unsecured personal loan specifically intended for renovations. Because it is not secured by your home, there is no risk of foreclosure if you are unable to make payments. However, this lack of collateral generally means that interest rates are higher compared to a home equity loan.

Personal Line of Credit

A personal line of credit (which is different from a personal loan) is a revolving credit line that can be used to pay for a variety of personal expenses. It is considered unsecured because it is not secured by your home equity. This lack of collateral results in less risk for you as the borrower, but it may lead to higher interest rates and lower credit limits compared to a HELOC.

Cash-Out Refinance

A cash-out refinance involves replacing your current primary mortgage with a new, larger one. With this type of mortgage refinance, the difference between the old mortgage balance and the new loan amount is paid to you as a lump sum of cash. This consolidates your debt into a single mortgage payment, but it also resets the term of your primary mortgage.

One important difference between a cash-out refinance vs. a home equity line of credit is that a cash-out refinance leaves you with just one monthly payment.

The Takeaway

A home equity loan can be the right option when you want to access a large, one-time sum of cash to fund significant expenses, such as home improvements or debt consolidation. Its primary advantages are a fixed interest rate and a predictable monthly payment schedule, which offer stability and make budgeting straightforward.

The Tennessee home equity loan calculator can help you get a handle on your monthly payments and maximum borrowing power before meeting with a lender.

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 much can I borrow with a home equity loan?

Lenders typically allow you to borrow up to 85% of your home’s equity.

What can I use home equity loan money for?

You can use the funds from a home equity loan for nearly any purpose. Some common types of purposes homeowners put the funds toward are home improvements like remodelings or repairs, or even debt consolidation.

Are there closing costs or fees with home equity loans?

There are closing costs (ranging from 2% to 5% of the loan amount) associated with home equity loans. These costs may include fees for a home appraisal, title search, and loan origination.

Does a home equity loan replace my first mortgage?

No. A home equity loan is a second mortgage. It is a separate loan with a separate payment. You will make payments on both loans concurrently.

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