Home Equity Calculator
Equity Is What's Actually Yours
The price a home would sell for and the amount its owner actually has are two very different numbers once a mortgage is in the picture. Home equity is the gap between them — the portion of the property's value that belongs to the owner outright, unencumbered by any lien — and it's the figure that determines borrowing power, sale proceeds, and net worth, not the home's sticker value alone.
The Formula
Equity % = (Home Equity / Home Value) × 100
The calculator also reports the complementary loan-to-value figure — total debt as a percentage of home value — since equity and LTV are two views of the same split.
Where This Calculation Matters
- Qualifying for a HELOC or home equity loan — lenders cap how much they'll advance based on a combined loan-to-value ratio, so knowing current equity is the first step before applying.
- Deciding whether to sell — equity minus estimated selling costs is the actual cash a sale would put in your pocket, which can be very different from the home's listed value.
- Tracking mortgage payoff progress — equity grows both from principal payments and from price appreciation, and separating the two shows how much is coming from each.
- Avoiding being underwater — when other liens plus the mortgage balance exceed home value, equity goes negative, a position worth identifying before making other financial decisions tied to the home.
Equity Buildup as a Mortgage Amortizes
On a $400,000 home with no change in market value, here's how equity and loan-to-value shift purely as the mortgage balance is paid down:
| Mortgage balance | Equity | Equity % | LTV |
|---|---|---|---|
| $380,000 | $20,000 | 5.0% | 95.0% |
| $300,000 | $100,000 | 25.0% | 75.0% |
| $200,000 | $200,000 | 50.0% | 50.0% |
| $100,000 | $300,000 | 75.0% | 25.0% |
| $0 | $400,000 | 100.0% | 0.0% |
How to Use This Calculator
- Enter the current Home Value (an appraisal or a reasonable market estimate).
- Enter the outstanding Mortgage Balance.
- Enter any Other Liens (a second mortgage, a home equity loan, an unpaid tax lien) if applicable.
- Select Calculate to see your equity in dollars, as a percentage of home value, and the corresponding loan-to-value ratio.
Related Calculations
Turn available equity into borrowing capacity with the HELOC Calculator, or see what a cash-out refinance could extract with the Cash-out Refinance Calculator.