equity loan example

how home equity loans work

For lending purposes your equity is the current value of your home less the amount outstanding on your mortgage or any other loans secured upon it.

The value of your home is based upon an independent valuation that is arranged for you and not the amount that you might sell it for. For example an Estate Agents valuation might be higher or possibly even lower but could be a useful guide before you apply. See the example below.

Look at the following table.

home equity loans example
how much equity can you use

The rules are very complicated but we can work out a plan for you.

See how much the repayments will be from the table below and consider the benefits to you of taking ALL or just some of the equity out of your home. Find out that taking a lower amount of equity is even cheaper than taking out more money. This is because using up all your equity is risky so the lenders expect you to pay more.

total cost of each loan

You can work out the total cost of each loan simply by multiplying the monthly repayments and the term.

95% Equity - £ 30,000 costs £ 373.44 x 180 = £ 44,812.80

100% Equity - £ 40,000 costs £ 418.08 x 180 = £ 75,254.40

how to get a home equity loan

Take a look at our secure online homeowner application form. You can view it first without giving out any information whatsoever. Upon receipt of your fully completed online application we will be able to put forward a proposal allowing for your available equity.

Remember you are under no obligation and there is no pressure to proceed so you have little to lose by applying online. This takes anything from 20 minutes upwards depending on how much you have to tell us and because you are not required to apply by telephone there is no pressure. Use this link to go back to the equity loan page.