Home Equity Loan vs. Auto loan Calculator
Use this calculator to determine if a home equity loan makes sense for your next automobile purchase.
How the home equity loan vs. auto loan calculator works
It amortizes the car purchase as an auto loan and as a home equity loan, comparing the payment and total interest. A home equity loan often has a lower rate but a longer term — and is secured by your house.
Worked example: with amount to finance of $30,000, auto loan rate of 7.50% and auto loan term (years) of 5, the home equity loan vs auto loan calculator shows less total interest of Auto loan.
- Auto loan payment
- $601.14
- Auto total interest
- $6,068
- Home equity payment
- $363.98
- Home equity interest
- $13,678
The formula
Each option: Payment = amount × r ÷ (1 − (1 + r)⁻ⁿ). The comparison weighs the lower-rate, longer-term home equity loan against the shorter auto loan.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the home equity loan vs. auto loan calculator
Is it smart to buy a car with a home equity loan?
The lower rate is tempting, but a longer term can mean more total interest, and you are putting your home at risk for a depreciating asset. The calculator shows the true cost trade-off.
Is home equity loan interest tax-deductible for a car?
Generally no. Since 2018, home equity interest is deductible only when the loan is used to buy, build or improve the home — not to buy a vehicle.
What is the main risk versus an auto loan?
An auto loan is secured only by the car; a home equity loan is secured by your house, so defaulting puts your home, not just the vehicle, at risk.
Is the Home Equity Loan vs. Auto loan Calculator free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.