Home Equity Calculator
Loans & MortgagesHow much of your home you own.
Value & loans
Enter your home's value to begin.
Advanced options
Enter your home's value to begin.
How this is calculated
- 1Home value − all loans = equity: $0 − $0 = $0
- 2Equity ÷ home value = your share: $0 ÷ $0 = 0.0%
- 3Home value × CLTV cap = borrowing limit: $0 × 0% = $0
- 4Borrowing limit − loans, floored at 0 = usable equity: max(0, $0 − $0) = $0
- 5Equity − usable equity, floored at 0 = locked cushion: max(0, $0 − $0) = $0
Equity projection
Equity by year
| Year | Home value | Loans | Equity | Share |
|---|---|---|---|---|
| Now | $0 | $0 | $0 | 0% |
| 1 | $0 | $0 | $0 | 0% |
| 2 | $0 | $0 | $0 | 0% |
| 3 | $0 | $0 | $0 | 0% |
| 4 | $0 | $0 | $0 | 0% |
| 5 | $0 | $0 | $0 | 0% |
| 6 | $0 | $0 | $0 | 0% |
| 7 | $0 | $0 | $0 | 0% |
| 8 | $0 | $0 | $0 | 0% |
| 9 | $0 | $0 | $0 | 0% |
| 10 | $0 | $0 | $0 | 0% |
Assumes 0.0%/yr appreciation and your mortgage amortizing over its remaining term. Estimates only — your lender's cap and home value will differ.
Formulas
| Metric | Formula | Your value |
|---|---|---|
| Your equity | Home value − all loans | $0 |
| Equity share | Equity ÷ home value | 0.0% |
| Loan-to-value | All loans ÷ home value | 0.0% |
| Max borrowing capacity | Home value × CLTV cap | $0 |
| Usable equity | Borrowing limit − loans | $0 |
| Combined LTV after | (Loans + usable equity) ÷ value | 0.0% |
Your inputs
| Input | What it is | Your value |
|---|---|---|
| Home value | Current market value of the home | $0 |
| Mortgage balance | Balance owed on the first mortgage | $0 |
| Max combined LTV | Lender's combined-LTV ceiling | 0% |
Know what this estimate is based on
- Jurisdiction
- General model; U.S.-specific rules are identified on the relevant tool
- Scope and limitations
- Educational estimate only. A lender may use different compounding, day-count, eligibility, tax, insurance, escrow, fee, or rounding rules.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter your home's current market value — what it would realistically sell for today, not what you paid.
- 02
Enter your mortgage balance, and under Advanced add any second mortgage or HELOC, your lender's combined-LTV cap, and an appreciation rate to project ahead.
- 03
Read your equity, your ownership share, your loan-to-value, and how much you could still borrow against the home.
Formula
Home equity = home value − all loans secured by the home (first mortgage + any second mortgage or HELOC). Equity share = home equity ÷ home value. Loan-to-value (LTV) = total loans ÷ home value — so equity share + LTV always add to 100%. Borrowing limit = home value × your lender's maximum combined loan-to-value (CLTV, usually 80–90%). Available to borrow = borrowing limit − loans you already owe (never less than zero).
Example
Suppose your home is worth 500,000 and you owe 300,000 on the mortgage. Your equity is 500,000 − 300,000 = 200,000 — an equity share of 40%, which is the same as a 60% loan-to-value. At an 85% combined-LTV cap, the home supports 500,000 × 0.85 = 425,000 of total lending; subtract the 300,000 you already owe and 125,000 is available to borrow. The other 75,000 of equity stays locked as the cushion the lender requires. If the home then appreciates about 3% a year while you keep paying the mortgage down, that 200,000 of equity grows to roughly 443,000 over ten years.
Definitions
- Home value
- The home's current market value — ideally a recent appraisal or comparable-sales estimate, not the original purchase price or the tax-assessed value.
- Mortgage balance
- The amount you still owe on your primary (first) mortgage, from your latest statement — not the original loan amount.
- Other liens
- Any second mortgage, home equity loan, or existing HELOC also secured by the home. These count against your equity just like the first mortgage.
- Home equity
- Home value minus every loan secured by the home. It is the share of the property you own outright; it can be negative if you owe more than the home is worth.
- Equity share
- Your equity expressed as a percentage of the home's value — your ownership stake.
- Loan-to-value (LTV)
- Total loans as a percentage of home value. Lenders watch it closely; 80% is the line above which mortgage insurance is usually required.
- Combined LTV (CLTV)
- The maximum share of your home's value a lender will allow across all loans at once. It sets the ceiling on how much you can borrow.
- Available to borrow
- Room left under the CLTV cap after your existing loans: home value × CLTV − loans owed, floored at zero.
Good to know
What home equity really means
Home equity is the portion of your property you own free and clear: its current market value minus every loan secured against it. If your home would sell for 500,000 today and you owe 300,000 on the mortgage, 200,000 of that home is genuinely yours. For most households it is the single largest piece of net worth — bigger than savings, retirement accounts, or investments — yet it is easy to overlook because it sits quietly in the walls rather than in a statement. Equity matters for three practical reasons. First, it is real wealth: when you sell, equity (minus selling costs) is the cash that lands in your pocket. Second, it is borrowing power: lenders will lend against it through home equity loans and lines of credit, usually at far lower rates than unsecured debt because the home backs the loan. Third, it is a cushion: a healthy equity stake protects you from being trapped if prices dip, because you can still sell or refinance without owing more than the home is worth. This calculator measures that stake from two simple inputs — value and what you owe — and then shows the percentages and borrowing capacity that lenders actually care about.
The two engines that build equity
Equity grows through two independent forces, and understanding both tells you how much control you really have. The first is principal paydown: every mortgage payment splits between interest and principal, and the principal portion is forced savings that lifts your equity month after month. Because mortgages are front-loaded with interest, this engine starts slow — in the early years most of your payment is interest and only a trickle reduces the balance — then accelerates as the loan matures. Extra payments, biweekly schedules, or simply not refinancing back to a fresh 30-year term all speed it up. The second engine is appreciation: when the home's market value rises, the gap between value and loan widens even though you have done nothing differently. Appreciation is powerful because it compounds on the whole property value, not just your stake, but it is also outside your control and can reverse. A third, smaller contributor is sweat equity — renovations and improvements that raise the home's value by more than they cost. The projection in this tool combines the first two engines: it amortizes your mortgage down year by year while growing the value at the appreciation rate you choose, so you can see how paydown and price growth stack up over a decade.
Equity share and loan-to-value: two sides of one coin
Your equity can be read from either side of the ledger, and lenders use the opposite side from the one you might expect. Equity share is your equity as a percentage of the home's value — the slice you own. Loan-to-value (LTV) is the loans as a percentage of value — the slice the lender has a claim on. They are perfect mirror images: a 40% equity share is exactly a 60% LTV, and the two always sum to 100%. The reason the distinction matters is that nearly every lending decision is framed in LTV terms. An LTV at or below 80% (equity share of 20% or more) is the threshold where private mortgage insurance typically falls away, where the best refinance rates appear, and where home equity borrowing opens up. As you pay down principal and the home appreciates, your LTV falls and your equity share rises in lockstep — crossing the 80% LTV line is often the first financial milestone of owning a home. Watching both numbers, rather than just the raw equity figure, tells you where you stand relative to the rules lenders live by. To explore that lending threshold on its own, the LTV ratio tool isolates this single number.
Borrowing capacity and the CLTV cap
The amount of equity you have and the amount you can borrow are two different numbers, and the gap surprises people. Lenders do not let you borrow your entire equity; they cap total borrowing at a combined loan-to-value (CLTV) ratio — the share of the home's value that all loans together may reach. Typical caps run from 80% to 90% depending on the lender, the product, your credit, and your income. The math is straightforward: multiply the home's value by the CLTV cap to get the borrowing ceiling, then subtract every loan you already owe; whatever is left is available to borrow. On a 500,000 home with a 300,000 first mortgage and an 85% cap, the ceiling is 425,000, so 125,000 is borrowable. The CLTV is 'combined' precisely because it counts all liens at once — a first mortgage, a second mortgage, and a HELOC all push against the same ceiling, which is why adding an existing second lien in the advanced options reduces what is left. This tool sizes the capacity; the mechanics of the products themselves — fixed lump sums versus revolving credit, draw and repayment periods, variable rates — belong to the home equity loan and HELOC calculators, which pick up where this one leaves off.
Tappable equity versus locked equity
It helps to split your equity into two buckets: the part you can access and the part the lender insists stays put. Tappable equity is the borrowable amount — what is available under the CLTV cap after your existing loans. Locked equity is everything above that ceiling: the cushion the lender always leaves between total lending and the home's full value. On the 500,000 home at an 85% cap, 75,000 of equity is locked by design even before counting your mortgage, because the lender will never lend the final 15% of value. This locked slice is not wasted — it is your protection. It absorbs a market downturn, it is the equity you keep if you sell, and it is what stops a moderate price drop from pushing you underwater. The donut in this calculator draws all three pieces — loans owed, borrowable equity, and locked equity — so you can see at a glance how the home's value divides between the lender's claim, your accessible cushion, and your protected cushion. As you pay down the mortgage, the borrowable slice grows while the locked slice holds steady at the lender's fixed percentage of value.
Negative equity: being underwater
When your loans exceed the home's value, your equity is negative and you are 'underwater' (or 'upside down'). It typically happens after a market decline, when you bought with a very small down payment, or when a cash-out refinance pushed the balance high just before prices softened. Negative equity is more than a paper problem. While underwater you generally cannot sell without bringing cash to closing to cover the shortfall, you cannot refinance to a better rate because there is no equity to lend against, and there is nothing to borrow for emergencies or improvements. The calculator handles this case honestly: it shows the equity as a negative number, flags the shortfall, and hides the borrowing breakdown because there is genuinely nothing available. The way out is the same two engines that build equity in the first place, just working in reverse of how you got here — keep paying down principal so the balance shrinks, avoid adding any new debt against the home, and let time and appreciation close the gap. The projection can show roughly how many years of steady paydown and modest appreciation it would take to surface back above water.
Using your equity wisely
Equity is borrowable, but borrowing against your home means putting the home itself on the line, so the bar for tapping it should be high. The strongest uses are ones that build value or save more than they cost: renovations that raise the property's worth, consolidating high-interest credit card or personal-loan debt into a much lower secured rate, or covering a genuine emergency when the alternative is far more expensive credit. The weakest uses are depreciating purchases and lifestyle spending — financing a vacation or a car against thirty-year collateral means paying for it long after it is gone, and every dollar borrowed resets equity you spent years building. Three guardrails help. Keep total borrowing comfortably below the CLTV cap rather than maxing it out, so a price dip does not leave you underwater. Make sure the new payment fits your budget even if interest rates rise, since many equity lines carry variable rates. And remember that secured debt converts an unsecured problem into one your house can be foreclosed over. When you do borrow, compare the true cost against alternatives first — the debt payoff and loan calculators can show whether consolidation actually saves money once the longer term is accounted for.
Why the projection is an estimate, not a promise
The year-by-year projection is a useful guide to the shape of equity growth, but it rests on assumptions that reality will bend. The appreciation rate is the biggest unknown: housing rises over long periods but moves in uneven cycles, and a few percentage points either way compounds into a large difference over a decade — try a low, medium, and high rate to see the range rather than trusting a single line. The mortgage paydown side is more reliable because amortization is fixed math, but it assumes you keep the same loan and term; refinancing, recasting, or extra payments all change the curve. The model also holds any second lien flat and ignores the costs that eat into equity when you actually sell — agent commissions, transfer taxes, and closing costs typically run several percent of the sale price, so realized equity is always somewhat less than the on-paper figure. Finally, the market value you enter is itself an estimate; a lender's appraisal can come in higher or lower and will drive the real numbers. Use the projection to understand the forces at work and roughly where you are heading, then confirm the specifics — your home's value and your lender's terms — before making decisions that depend on them.
Home equity loan vs HELOC
Two products turn equity into cash, and they suit different needs. A home equity loan is a second mortgage: you borrow a fixed lump sum, at a fixed rate, repaid over a set term in equal principal-and-interest installments — predictable, and best when you know the exact amount you need up front, like a single renovation or a debt consolidation. A HELOC (home equity line of credit) is a revolving line you draw against as needed, usually at a variable rate, with an interest-only 'draw period' (often around ten years) followed by a 'repayment period' when principal kicks in and the payment jumps. A HELOC is flexible and cheap while you're only paying interest, which is why this calculator's repayment estimate shows both an interest-only figure (the typical HELOC draw-period payment) and a full principal-and-interest figure (a home equity loan, or a HELOC once repayment starts). The trade-off is certainty versus flexibility: the loan locks your rate and payment; the line keeps options open but exposes you to rising rates and a payment shock when the draw period ends. Both are secured by your home and both count against the same CLTV ceiling.
Real-world ways people use equity
The most defensible uses share a trait: they create value or replace more expensive debt. Renovations that genuinely lift the home's worth — a kitchen, an extra bathroom, energy efficiency — can return part of their cost as higher value, partly refinancing themselves. Consolidating high-interest credit card or personal-loan balances into equity borrowing can cut the rate dramatically, though only if you then stop running the cards back up. Equity can bridge a gap when buying the next home before the current one sells, fund a child's education at a lower rate than many student loans, or cover a true emergency when the alternative is far costlier credit. Some investors tap equity to buy income property or to invest, which can work but stacks leverage on leverage and turns a market downturn into a double hit. The scenario comparison in this tool is meant for exactly this decision: it shows how borrowing conservatively, at your cap, or aggressively changes how much you can access and how thin your cushion becomes.
Common mistakes to avoid
A handful of errors recur. The first is overestimating the home's value — using a hopeful number or an old peak price inflates every figure, and a lender's appraisal will bring you back to earth, so anchor to recent comparable sales. The second is borrowing to the absolute CLTV ceiling: maxing out leaves no buffer, so a modest price dip pushes you underwater and traps you. The third is using equity for depreciating purchases or lifestyle spending — financing a car or a holiday against thirty-year collateral means paying for it long after it's gone. The fourth is ignoring variable-rate risk on a HELOC: a payment that's comfortable today can climb sharply, and the end of the draw period brings a step-up many borrowers forget to plan for. The fifth is serial cash-out refinancing that resets the balance every few years, so the mortgage never shrinks and equity never compounds. The thread through all of them is treating equity as free money rather than borrowed money secured by your home.
Risks and limitations
Borrowing against equity converts an unsecured problem into one your house can be foreclosed over — that is the central risk and the reason the bar should be high. Beyond it: variable rates can lift payments well above today's estimate; extending or resetting the term means paying interest for longer even at a lower rate; and a falling market can erase the cushion and leave you underwater, unable to sell or refinance without bringing cash. There are frictions too — appraisal fees, closing costs, and sometimes early-closure fees — that make small draws uneconomic. This calculator has its own limits worth stating plainly: it estimates capacity from the value and CLTV cap you enter, not from your income or credit, so a lender's actual offer depends on serviceability checks this tool doesn't run; the payment figures assume a single rate and term; and the projection assumes a steady appreciation rate the real market won't deliver. Treat every number here as a well-reasoned starting point for a conversation with a lender, not a guarantee.
Frequently asked questions
What is home equity?
Home equity is the part of your property you own outright: its current market value minus everything you still owe against it. If your home is worth 500,000 and you owe 300,000, you have 200,000 of equity. It is one of the largest components of most households' net worth and the collateral behind home equity loans and lines of credit.
How much of my equity can I actually borrow?
Not all of it. Lenders cap total borrowing at a combined loan-to-value (CLTV) ratio — commonly 80–90% of the home's value across every loan. Your available amount is that ceiling minus what you already owe. On a 500,000 home with a 300,000 mortgage and an 85% cap, the ceiling is 425,000, so 125,000 is borrowable while 75,000 of equity stays as a required cushion.
What's the difference between equity share and loan-to-value?
They are mirror images. Equity share is the percentage of the home you own; loan-to-value is the percentage the lender's loans cover. They always add up to 100%. A 40% equity share is the same situation as a 60% LTV — one just looks at it from your side, the other from the lender's.
Does my down payment count as equity?
Yes. The day you buy, your equity equals your down payment (value minus the loan). From there it grows two ways: every mortgage payment chips away at the balance, and any rise in the home's value lifts the gap between value and what you owe.
Can home equity be negative?
Yes — that's called being underwater or having negative equity, and it happens when your loans exceed the home's value (often after a price drop or with a very small down payment). While underwater you generally can't sell or refinance without bringing cash to the table, and there's nothing to borrow against until you pay the balance down or values recover.
How do I grow my home equity faster?
Pay more than the minimum toward principal, make biweekly or extra payments, avoid cash-out refinancing that resets the balance, and maintain or improve the property so it holds value. Time and appreciation do the rest. The year-by-year projection here shows how paydown and appreciation compound together.
How accurate is the borrowable amount?
Treat it as a planning estimate. The figure depends on the market value you enter and the CLTV cap you choose; your lender will order its own appraisal and set its own cap based on your credit, income, and the property. Use this to see the ballpark, then confirm the exact number with a lender.