Home Improvement Loan Calculator
Estimate the monthly payment and total interest on a home improvement or renovation loan — add a contingency buffer, your own cash and an origination fee, see the true APR, how much you can borrow for a monthly budget, extra payments, a full schedule and a side-by-side comparison with a home equity loan and HELOC.
How it works
Payment = P·r ÷ (1 − (1+r)^−n), r = APR ÷ 12, n = months · P = (project × (1 + contingency) − cash) ÷ (1 − fee) when the fee is taken out of the loan · Total interest = payment × n − P · Borrowing for a budget: P = payment × (1 − (1+r)^−n) ÷ r
A home improvement loan is usually an unsecured personal loan used for a renovation, with a fixed rate, a fixed term and no house as collateral. Because it is unsecured, the rate is higher than a home equity loan or HELOC, but you do not risk the house and there are no closing costs. Many lenders charge an origination fee instead, usually taken out of the loan. You then have to borrow a little more to end up with the full project cost, so the calculator grosses the loan up and works out the true APR from the cash that reaches your project. Renovations often cost more than the quote, so you can add a contingency buffer and subtract the cash you will put in yourself. You can also flip the question and see how big a project a monthly budget can pay for. With the comparison switched on, the same amount is priced as a home equity loan (with closing costs) and as a HELOC (interest-only during the draw period, then repaid), and checked against the equity you could borrow at 85% of your home’s value. Extra monthly payments, a payoff date and full yearly and monthly schedules are included.
Worked example
Financing a $25,000 renovation at 10.5% over 7 years (84 payments): r = 0.875% a month, so the payment is about $421.52. You repay about $35,407 in total, of which about $10,407 is interest. Add a 10% contingency and a 4% fee taken out of the loan, and you need $27,500, which means borrowing $28,646. The payment rises to $482.99 and the true APR to about 11.8%. The same $27,500 as a 15-year home equity loan at 8.25% costs $266.79 a month but $20,522 in interest plus $550 closing costs.
Sources: CFPB — What is the difference between a loan interest rate and the APR? · IRS Publication 936 — Home Mortgage Interest Deduction
Frequently asked questions
Is a home improvement loan the same as a home equity loan?
No. A home improvement loan is typically an unsecured personal loan — no collateral, faster funding, higher rate. A home equity loan or HELOC is secured by your house, usually at a lower rate but with closing costs and the risk of foreclosure. Switch on the comparison to see the monthly payment and total cost of each for your project.
How much can I borrow for my monthly budget?
Choose “How much I can borrow” and enter the payment you can afford. The calculator turns it into a loan amount at your rate and term, then takes off any fee and adds your own cash to show the size of project you can pay for.
Can I deduct the interest?
Interest on an unsecured personal loan used for home improvements is generally not tax-deductible. In the US, interest on a home equity loan or HELOC used to buy, build or substantially improve the home that secures it can be deductible if you itemize, within the mortgage interest limits. Check with a tax professional.
How much contingency should I add?
Many contractors and lenders suggest 10%–20% of the quote, more for older homes where surprises behind walls are common. Borrowing the buffer upfront is usually cheaper than taking a second loan or putting overruns on a credit card.
Should I finance a renovation or pay cash?
Paying cash avoids interest entirely. Financing makes sense when the project cannot wait, when it protects the home from further damage, or when it adds more value than the interest costs. Enter the expected increase in home value to see the net cost.
Related calculators
Educational estimate, not financial advice. Actual loan terms, fees and taxes vary by lender.