Home Equity Calculator

See how much equity you have in your home, your LTV and combined LTV, how much a lender could let you borrow, and how equity grows as you pay down the mortgage.

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Results will appear here once you enter your values.

How home equity is calculated

Home equity is the share of your home you own outright: current market value − every loan secured by the home. That includes your first mortgage and any second mortgage or HELOC balance. A $450,000 home with a $250,000 mortgage has $200,000 of equity, or 44.4% of its value.

Market value is the uncertain part. Online estimates can be off by 5% or more, so base the value on recent sales of similar homes nearby or a recent appraisal. If you owe more than the home is worth, equity is negative, which is often called being underwater.

LTV, CLTV and how much you could borrow

Loan-to-value (LTV) is your first mortgage ÷ home value. Combined LTV (CLTV) adds every other lien. Lenders use CLTV to cap home equity loans and HELOCs, usually at 80–85% and sometimes 90%.

Borrowable equity = home value × CLTV limit − total owed. For the $450,000 home with a $250,000 mortgage, that is $110,000 at 80%, $132,500 at 85% and $155,000 at 90%. Add a 40,000 HELOC balance and CLTV rises from 55.6% to 64.4%, cutting each figure by40,000. You can never borrow all of your equity: lenders keep a cushion in case prices fall.

How equity grows: paydown plus appreciation

Equity grows two ways. Each mortgage payment moves part of the balance into equity, slowly at first because early payments are mostly interest. A $250,000 balance at 6.5% with a $1,580.17 payment falls to about $234,027 after five years, which adds roughly $16,000 of equity.

Price growth usually does more. At 3% a year the same $450,000 home is worth about $521,673 in five years, so equity grows from $200,000 to about $287,646. Set growth to 0% to see paydown alone, or use a negative rate to test a price decline. The projection holds other liens flat because their terms aren’t entered.

Common mistakes

  • Using the purchase price or a tax assessment instead of today’s market value.
  • Forgetting a HELOC or second mortgage, which makes CLTV and borrowable equity look better than a lender will see them.
  • Entering the full monthly payment including taxes and insurance (escrow). Only principal and interest reduce the balance.
  • Treating equity as cash. Selling costs of 6–10% and the lender’s CLTV cushion mean you can access much less than the headline figure.

Frequently Asked Questions

Common questions about the Home Equity Calculator

Subtract everything you owe on the home, including the first mortgage, any second mortgage and HELOC balances, from its current market value. A $450,000 home with a $250,000 mortgage has $200,000 of equity (44.4%).

Sources & References

Loan-to-Value (LTV) Ratios, Selling Guide B2-1.2-01

Defines LTV and combined LTV (CLTV) as all mortgage liens divided by the property value.
→Source: Fannie Mae

What is a loan-to-value ratio and how does it relate to my costs?

Explains how LTV is calculated and why it affects borrowing options and costs.
→Source: Consumer Financial Protection Bureau

What is a home equity line of credit (HELOC)?

Describes borrowing against home equity and the risk of using the home as collateral.
→Source: Consumer Financial Protection Bureau

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