Home Equity Calculator

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Find your home equity, LTV ratio, and how much you can borrow via a HELOC or home equity loan. Formula and benchmarks explained.

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Borrowing Capacity

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Home Equity

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Equity %0%
LTV Ratio0%
Apprecation Gain$0
Max Borrowing (HELOC)$0
Combined LTV at Max0%

📐 Home Equity Formula

Equity = Home Value − (Mortgage Balance + Second Mortgage)
LTV = (Mortgage Balance / Home Value) × 100
Max Borrowing = (Home Value × Max CLTV%) − Existing Mortgage(s)
Appreciation Gain = Current Value − Original Purchase Price

What Is Home Equity and Why Does It Matter?

Home equity is the portion of your home's value that you own outright — the difference between what your home is worth and what you still owe on your mortgage. It's one of the most powerful wealth-building tools available to homeowners, growing both as you pay down your loan and as property values appreciate.

How to Use Home Equity

There are three main ways to access home equity: a Home Equity Loan (a lump-sum loan at a fixed rate), a HELOC (Home Equity Line of Credit, a revolving credit line at a variable rate), or a cash-out refinance (replacing your existing mortgage with a larger one). HELOCs are flexible and popular for renovation projects; home equity loans suit one-time large expenses.

LTV Ratios and What They Mean for You

Your Loan-to-Value ratio determines your borrowing options. Below 80% LTV means no PMI and access to the best rates. 80–85% LTV — most lenders require PMI if it's your primary mortgage; HELOC borrowing may be limited. 85–90% — fewer lenders, higher rates. Above 90% — very limited options, significantly higher rates. The calculator above shows your current LTV and flags which bracket you're in.

Sources & Methodology

Calculations are based on the most current publicly available data from authoritative government and industry sources:

Frequently Asked Questions

Home equity = Current Market Value − Outstanding Mortgage Balance. If your home is worth $450,000 and you owe $280,000, your equity is $170,000 (37.8%). Equity grows as you pay down your mortgage and as property values increase.
Most lenders allow you to borrow up to 80–85% of your home's value combined (existing mortgage + new loan). With 80% CLTV limit: if home is worth $450,000, max combined borrowing is $360,000. Subtract your mortgage balance ($280,000) and you can borrow up to $80,000 via a HELOC or home equity loan.
LTV below 80% is considered good — it means you have at least 20% equity, avoids PMI on conventional loans, and qualifies you for the best interest rates. LTV of 80–90% is acceptable but may carry PMI or higher rates. Above 90% LTV limits your options. Below 60% LTV gives access to the most favorable loan terms.
Make extra mortgage payments (even $100–$200/month extra accelerates paydown significantly), make a larger down payment upfront, choose a 15-year over a 30-year mortgage, complete value-adding renovations (kitchens and bathrooms typically return 60–80%), and benefit from general market appreciation. Equity = current market value minus remaining mortgage balance.
A Home Equity Line of Credit (HELOC) lets you borrow against your home equity at a variable rate. Most lenders allow borrowing up to 80–85% combined loan-to-value (CLTV). Draw period: 5–10 years (borrow and repay like a credit card). Repayment period: 10–20 years (pay principal + interest). HELOCs typically have variable rates tied to the prime rate.