Home Equity Calculator

Calculate your current ownership stake in your property.

Estimated price if sold today.

Current principal amount owed.

Include second mortgages or other debt secured by the home.

Total Home Equity $0

Equity Percentage 0%

Loan-to-Value (LTV) Ratio 0%

Understanding Your Home Equity

Home equity represents the portion of your property that you truly "own." It is the difference between the current market value of your home and the total amount of all debts secured by that property. As you pay down your mortgage principal or as local property values rise, your equity increases.

How the Calculation Works

The formula for home equity is straightforward but vital for financial planning:

Home Equity = Current Market Value – Total Outstanding Debt

Total debt includes your primary mortgage, any second mortgages, and Home Equity Lines of Credit (HELOC) balances.

Why Equity Matters

• Borrowing Power: Lenders typically allow you to borrow against your equity via a HELOC or Home Equity Loan, often up to an 80-85% combined LTV ratio.
• Selling Profit: Your equity (minus closing costs and commissions) is the cash you walk away with when you sell the home.
• PMI Removal: Once your equity reaches 20% (an 80% LTV), you may be eligible to stop paying Private Mortgage Insurance.

Real-World Example

Imagine you purchased a home for $400,000. Over five years, the market has improved, and the property is now worth $500,000. Your mortgage balance has been paid down to $320,000.

• Market Value: $500,000
• Minus Debt: -$320,000
• Resulting Equity: $180,000 (36% Equity)