Home Equity Calculator
Determine your current home equity by subtracting what you owe from your home value. See how much you could borrow through a home equity line of credit (HELOC) based on your lender's maximum loan-to-value ratio.
Home equity is the slice of your home you actually own — the difference between what the home is worth and what you still owe against it. On a $400,000 home with a $250,000 mortgage and no other liens, your equity is $150,000. That number tends to grow over time from two directions: your mortgage balance shrinks with every monthly payment (slowly at first, faster later), and the home itself usually appreciates in market value at a 3–5% long-run pace.
Equity matters because it's the largest single component of net worth for most American households, and because it can be tapped for cash through a Home Equity Line of Credit (HELOC), a home equity loan, a cash-out refinance, or a reverse mortgage (if you're 62+). Lenders cap how much of your equity is borrowable using a Combined Loan-to-Value (CLTV) ratio — typically 80–85% of the home's value across all loans secured by the property. The math is straightforward: maximum borrowable equity equals home value times the CLTV cap, minus everything currently secured by the home.
This calculator computes your current equity and your available borrowing capacity under a chosen CLTV cap, and shows a sample monthly interest cost at the entered HELOC rate. Use it to understand your equity position before applying for a loan, and to test what a value-adjusted appraisal might mean for your borrowing power. Treat the result as a starting estimate — actual loan offers depend on credit score, income, debt-to-income, and the lender's specific overlay rules.
Inputs
Results
Total Home Equity
$150,000
Equity Percentage
37.5%
Available HELOC
$70,000
Current LTV
62.5%
Home Value Breakdown
Formula
How to use this calculator
- Enter your home's current market value. Sources: recent comparable sales, Zillow/Redfin/Realtor.com estimates (treat as rough), or a paid appraisal (most accurate). Lenders will order their own appraisal at application time.
- Enter your current mortgage balance — what you owe today, not the original loan amount.
- Enter other liens secured by the home: an existing HELOC, a home equity loan, a second mortgage, or a contractor's lien. Most homeowners have only the first mortgage.
- Enter the HELOC interest rate you expect — typically Prime + a margin set by the lender. In moderate-rate environments, this often quotes at 8–10%.
- Set the maximum CLTV the lender will allow. 80% is the most common cap; some lenders go to 85% with strong credit, a few specialty programs to 90%.
- Review your current equity and available borrowing capacity. The "equity" figure is your net ownership stake; the "available borrowing" figure is what you could draw against it.
- If your home value is uncertain, run the calculator with a +/-10% range — small home-value differences make big borrowing-capacity differences near the LTV cap.
- Pair this with the HELOC calculator (for payment scenarios), the mortgage-refinance calculator (cash-out alternative), and the home-affordability calculator (to size any equity-financed home improvements against your overall budget).
Worked examples
Typical mid-mortgage homeowner
Home value: $500,000. Mortgage: $300,000. No other liens. 80% CLTV cap. Equity: $500,000 − $300,000 = $200,000 Maximum debt: $500,000 × 0.80 = $400,000 Available borrowing: $400,000 − $300,000 = $100,000 If you draw $80,000 at 8.5%: interest-only monthly cost ≈ $567. New CLTV: 76%. Plenty of breathing room. Good position for renovation funding or debt consolidation if the use is value-creating.
Recently appreciated home — equity bonanza
Bought 7 years ago for $300,000 with 20% down. Now worth $550,000. Mortgage balance: $215,000. Equity: $550,000 − $215,000 = $335,000 At 80% CLTV: Max debt $440,000. Available borrowing: $225,000. Substantial borrowing capacity built up entirely from market appreciation plus principal paydown. Common for owners who bought before recent runs in housing values.
Over-leveraged — no available equity
Home value: $350,000. Mortgage: $310,000 (originated at higher LTV). Existing HELOC balance: $25,000. 80% CLTV cap. Equity: $350,000 − $310,000 − $25,000 = $15,000 Max debt: $350,000 × 0.80 = $280,000 Existing total debt: $310,000 + $25,000 = $335,000 Available borrowing: $0 (already over the cap by $55,000). In this situation, the homeowner cannot take additional secured borrowing. Either the home would need to appreciate, the existing mortgage would need to be paid down, or the homeowner would need an unsecured loan instead.
When to use this calculator
Use this calculator any time you're thinking about using your home equity — for a renovation, a debt consolidation, a college tuition need, a business investment, or just to understand your overall net worth position. Knowing your available borrowing capacity is the first step in deciding whether a HELOC, home equity loan, or cash-out refinance is even feasible.
It's also useful as an annual check-in. Home values move, mortgage balances drop, and the gap between the two — your equity — is one of the largest assets on the household balance sheet. Watching it grow (or, occasionally, shrink) is part of long-term wealth tracking.
Pair this calculator with the HELOC calculator (to model draw and repayment payments), the mortgage-refinance calculator (cash-out refi is often a better alternative when current mortgage rates are competitive), and the rental-property calculator if the equity tap is for an investment property purchase.
It is not a substitute for an actual loan application. Lenders evaluate credit, income, employment, debt-to-income ratio, and property condition in addition to LTV — a strong equity position alone doesn't guarantee approval. Use the calculator as the math floor; actual loan offers vary.
Common mistakes to avoid
- Using an inflated home value. Zestimates and rough comps can run 10–15% above what a lender's appraisal will support. Don't plan around the best-case number — use a conservative estimate.
- Forgetting other liens. A previously taken-out HELOC, even with a zero balance, reduces your available borrowing if it's still open. Lenders count the available credit line, not just the drawn amount, against CLTV.
- Confusing equity with cash. Home equity is wealth on paper. Converting it to cash requires a loan (with interest), a sale (with transaction costs), or a reverse mortgage (with strings attached). Don't treat the equity number as spendable money.
- Borrowing the maximum just because you can. Drawing to the 80% CLTV cap leaves no buffer for a home-value decline. If the market drops 15%, you could be underwater — owing more than the home is worth.
- Skipping the closing costs comparison. A HELOC may have $0–$1,500 in fees; a cash-out refinance has full mortgage closing costs ($3,000–$8,000+). For small loan amounts, fees can swing the better choice.
- Treating home equity as the only emergency fund. Equity is illiquid and slow to access (HELOCs take weeks to set up). A liquid 3–6 month emergency fund still belongs in cash, even with a $200,000 equity cushion.
Frequently Asked Questions
Sources & further reading
- Home equity loans and HELOCs — explainer — U.S. Consumer Financial Protection Bureau
- When Your Home is on the Line — what to know about home equity lending — Board of Governors of the U.S. Federal Reserve
- Home Affordability and Mortgage Disclosure data — Federal Financial Institutions Examination Council