Home Equity Calculator
Calculate how much equity you have in your home based on current market value and remaining mortgage balance, plus your loan-to-value ratio.
Results
Visualization
How It Works
Home equity is the difference between your home's current market value and the total amount you owe on it. Equity grows as you pay down your mortgage and as your property appreciates in value. Knowing your equity is essential for refinancing, selling, or borrowing against your home.
The Formula
LTV = Total Debt / Home Value x 100
Appreciation = Current Value - Original Purchase Price
Variables
- Home Value — Current estimated market value of the property
- Total Debt — Sum of mortgage balance plus any other liens or second mortgages
- LTV — Loan-to-value ratio, showing what percentage of your home is financed
Worked Example
You bought your home for $320,000 and it is now worth $400,000. You owe $260,000. Your equity is $140,000 (35%), and your LTV is 65%. The home has appreciated $80,000 (25%).
Practical Tips
- An LTV below 80% means you can avoid private mortgage insurance (PMI) when refinancing.
- You can borrow against equity through a HELOC or home equity loan, typically up to 80-85% combined LTV.
- Get a professional appraisal for the most accurate home value, especially before selling or refinancing.
- Home improvements like kitchen and bathroom remodels can boost equity, but rarely dollar-for-dollar.
- Track your equity annually to understand your net worth and borrowing capacity.
Frequently Asked Questions
How do I find my current home value?
You can get estimates from sites like Zillow or Redfin, check recent comparable sales in your area, or hire a licensed appraiser for the most accurate valuation.
What is a good LTV ratio?
An LTV of 80% or lower is considered good. Below 80% eliminates the need for PMI, and below 60% often qualifies you for the best loan rates.
Can I have negative equity?
Yes. If your home value drops below what you owe, you are "underwater." This makes refinancing and selling difficult without bringing cash to closing.
Does paying extra on my mortgage build equity faster?
Yes. Extra principal payments reduce your balance faster, directly increasing your equity and reducing the total interest you pay.
Is home equity the same as net proceeds from a sale?
No. When you sell, you pay closing costs (typically 6-10% of the sale price for agent commissions, taxes, and fees), which reduce your actual proceeds below your equity amount.