🔑 Home Equity Calculator
Find your current equity and an estimate of how much you could borrow against it.
Understanding Home Equity
Home equity is the portion of your home you actually "own" — the difference between what it's worth and what you still owe on it. It grows over time as you pay down your mortgage principal and as your home's market value rises. Equity is one of the most common ways homeowners access relatively low-cost credit, through a home equity loan or a home equity line of credit (HELOC).
Lenders don't typically let you borrow against 100% of your equity. Instead, they set a maximum combined loan-to-value (CLTV) ratio — commonly 80% to 85% — meaning your mortgage balance plus any new home equity loan together can't exceed that percentage of your home's value.
Frequently Asked Questions
What's the difference between a home equity loan and a HELOC?
A home equity loan gives you a lump sum with a fixed interest rate and fixed payments. A HELOC works more
like a credit card — a revolving credit line you can draw from as needed, usually with a variable rate.
Does paying down my mortgage faster increase my equity?
Yes — every extra dollar of principal you pay down directly increases your equity by that same dollar,
independent of any change in your home's market value.
Guide: understanding your result
- Home equity = current market value − all loans secured by the home.
- Lenders often limit combined loan-to-value (CLTV) for home equity loans and HELOCs to about 80%–85%.
- Borrowing against equity puts the home up as collateral.
Worked example
A home worth $450,000 with a $280,000 mortgage has $170,000 of equity (37.8%). At an 80% CLTV limit, the maximum additional borrowing would be about $80,000; at 85%, $102,500.
Common mistakes to avoid
- Using a list price or online estimate instead of an appraisal.
- Forgetting a second mortgage or existing HELOC in the loan total.
Official sources
Examples are calculated live from the same data the calculator uses and are for education only — they are not financial, tax or investment advice.
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