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Home Equity Calculator

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Enter your home's current value and remaining mortgage balance to find your equity and loan-to-value ratio.

Home Equity Calculator

Live
Your home equity
$150,000
Equity %
37.5%
Loan-to-value (LTV)
62.5%
Lenders typically want to see at least 20% equity (80% LTV or lower) before approving a home equity loan or line of credit.

The formula

Home equity = Current home value - Remaining mortgage balance Loan-to-value (LTV) = Remaining balance / Home value
Example

A $400,000 home with a $250,000 remaining mortgage: equity = 400,000 - 250,000 = $150,000 (37.5% equity, 62.5% LTV).

Step-by-step guide

  1. Enter your home's current market value - a recent appraisal or a realistic comparable-sales estimate works best.
  2. Enter your remaining mortgage balance (from your latest mortgage statement).
  3. Read your equity amount, equity percentage, and loan-to-value ratio.

Why LTV matters beyond just knowing your equity

Loan-to-value ratio is the figure lenders actually focus on when you apply for a home equity loan, HELOC, or refinance - it's essentially the inverse of your equity percentage, expressed as how much of the home's value is still financed. Most lenders cap combined LTV (your existing mortgage plus any new equity loan) at 80-85%, which is why simply having positive equity isn't always enough to qualify for a large home equity loan - the remaining room under that LTV ceiling is what actually determines how much you can typically borrow against your equity.

Common mistakes

Using your original purchase price instead of current market value - equity is based on what the home is worth today, which may have risen or fallen since you bought it.
Forgetting other liens against the property (like a second mortgage or HELOC already in place) - true available equity accounts for all outstanding balances secured by the home, not just the primary mortgage.

Frequently asked questions

How much of my equity can I actually borrow?

Most lenders allow borrowing up to a combined 80-85% LTV, not 100% of your equity - so with 37.5% equity (62.5% LTV) on a $400,000 home, there's typically room to borrow up to roughly another 17.5-22.5% of the home's value, not the full $150,000.

What's the difference between a home equity loan and a HELOC?

A home equity loan gives you a lump sum with a fixed rate, similar to a second mortgage. A HELOC (home equity line of credit) works more like a credit card - a revolving credit line you draw from as needed, typically with a variable rate.

Does paying down my mortgage faster increase equity?

Yes - every extra dollar paid toward principal (not interest) directly increases your equity by the same amount, independent of any change in market value.

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