Home Equity Calculator
Estimate your available equity, loan-to-value ratio, borrowing room, and potential cash you may be able to access.
Your Home & Loan
Optional Borrowing Estimate
Optional Affordability Check
Equity Breakdown
Borrowing Scenario
Estimated Payment
Debt-to-Income Check
How This Calculator Works
Your home equity is generally the current value of your property minus the debt secured by it. As you pay down mortgage principal, your balance can decrease and your equity can increase. Changes in the property’s market value can also change the amount of equity you have.
The calculator also estimates your loan-to-value ratio and a possible borrowing amount using the maximum CLTV percentage you enter. This is only an estimate because lenders use their own underwriting requirements, property valuations, credit information, income and debt information.
What Is Home Equity?
Home equity is the portion of your property that you effectively own after subtracting outstanding debt secured against it. For example, if a home is worth $400,000 and the total secured debt is $250,000, the estimated equity is $150,000.
Equity can change over time. Paying down the mortgage can increase it, while a decline in the property’s value can reduce it. This means the number shown here is an estimate based on the information you enter.
How Much Could You Borrow?
A lender may limit borrowing using a loan-to-value or combined loan-to-value calculation. For example, if a lender allowed total secured debt equal to 80% of a property’s value, the maximum debt would be calculated using that percentage before subtracting existing balances.
The amount you may actually qualify for can be lower. Lenders can also consider your income, existing obligations, credit history, property value and other factors.
Home Equity Loan vs. HELOC
A home equity loan generally provides a lump sum that you repay according to the loan terms. A HELOC is a revolving line that lets you borrow repeatedly up to an approved limit during the draw period. HELOCs commonly have adjustable rates, so payments can change.
Both products use your home as collateral, so missing payments can put the property at risk. Compare the interest rate, fees, repayment terms and total cost before choosing a product.
Example
Suppose your home is worth $400,000 and you owe $250,000 on your mortgage. Your estimated equity would be $150,000, or 37.5% of the property’s value. If you also had a $25,000 second lien, your total secured debt would be $275,000 and your equity would be approximately $125,000.
If you enter an 80% maximum CLTV, the calculator estimates how much total debt could fit within that percentage and subtracts your existing secured balances to show an estimated borrowing room.
Important Things to Consider
- Property values can change.
- Your lender may require an appraisal or other valuation.
- Actual borrowing limits vary between lenders and loan products.
- Interest rates and fees can significantly affect the cost of borrowing.
- A HELOC may have a variable rate and changing monthly payments.
- Using your home as collateral means missed payments can create serious risk.
Frequently Asked Questions
How is home equity calculated?
Estimated equity is calculated as the current property value minus outstanding debt secured by the property. If there are multiple loans secured against the home, those balances should be considered together.
What is a good amount of home equity?
There is no single amount that is considered good for every homeowner. Your equity depends on your property value, mortgage balance and other secured debt. More equity generally means a larger ownership share of the property, but it does not automatically mean you can borrow that entire amount.
How much can I borrow against my home?
The amount depends on the lender’s maximum LTV or CLTV, your existing balances, property value and your financial profile. Entering a maximum CLTV above provides an estimate rather than a guaranteed borrowing limit.
What is the difference between LTV and CLTV?
LTV compares one mortgage balance with the property’s value. CLTV considers multiple debts secured by the property, such as a first mortgage and a HELOC or second mortgage.
Does paying my mortgage increase equity?
Paying down mortgage principal generally reduces the amount you owe, which can increase your equity if the property’s value stays unchanged. Interest and other costs do not reduce the principal balance in the same way.
Can I use home equity to get cash?
Some homeowners use products such as a home equity loan or HELOC to access funds. The appropriate option depends on the borrower’s goals, financial situation, lender terms and ability to repay.
Is the result guaranteed by a lender?
No. The calculator is an estimate. A lender can use an appraisal, underwriting requirements, income, debts, credit information and other criteria when making an actual lending decision.