Home Equity Calculator

How it is calculated

The tool runs three formulas: equity = value − balance, equity % = equity ÷ value × 100 and available = value × LTV ÷ 100 − balance. Here value is the current market value of the home, balance is the total you still owe on loans secured by it, and LTV is the maximum combined loan-to-value percentage a lender allows. If you leave LTV empty the tool uses 80. The borrowable amount is never shown below zero: when your balance already exceeds the LTV limit it reads 0. Equity itself can go negative if you owe more than the home is worth. Lender limits differ by country and product, so treat the LTV as an assumption you should confirm.

Common mistakes

• Using the purchase price instead of today's market value; equity is measured against what the home would sell for now.
• Entering only the first mortgage in balance and forgetting a second mortgage or an existing home equity line, which overstates the amount you can borrow.
• Confusing equity with borrowable amount: equity is 100% of value minus debt, while the borrowable figure stops at the LTV limit, so it is always smaller.
• Typing LTV as a decimal such as 0.8 instead of 80; the field expects a percentage.
• Expecting a negative result for the borrowable amount when you owe too much; it is floored at 0, so check the equity figure for negative equity.