Home Equity Calculator
Home equity is the difference between what your home is worth and what you still owe on it. It represents your real ownership stake in the property. Knowing your equity helps you understand your net worth, assess whether you can remove PMI, evaluate refinancing options, or determine how much you could borrow through a HELOC or home equity loan. Enter your current home value and mortgage balance to see your equity instantly.
Home equity formulas
Home Equity ($) = Current Home Value - Mortgage Balance
Equity Percentage (%) = Home Equity / Home Value x 100
Loan-to-Value (LTV) % = Mortgage Balance / Home Value x 100
Max HELOC at 80% LTV = (Home Value x 0.80) - Mortgage Balance
Note that lender limits vary. Many lenders cap combined LTV (first mortgage plus HELOC) at 80 to 85% for home equity products. If the result is negative, you do not have sufficient equity to borrow against at 80% LTV.
Why equity matters
- Reaching 20% equity (80% LTV) typically eliminates the need for private mortgage insurance (PMI) on conventional loans.
- Higher equity gives you more options: cash-out refinancing, HELOCs, and home equity loans all require minimum equity thresholds.
- Equity is a component of your personal net worth and grows with every mortgage payment and property value increase.
- When you sell, your equity (minus selling costs) represents the cash you walk away with.
Home equity calculator: frequently asked questions
What is home equity?
Home equity is the portion of your home's value that you own outright, free of any mortgage debt. It equals your home's current market value minus the outstanding balance on any mortgages or home equity loans secured against the property. Equity grows as you pay down the mortgage and as the property value increases.
How is home equity calculated?
Home Equity = Current Home Value - Outstanding Mortgage Balance. For example, if your home is worth $400,000 and you owe $250,000, your equity is $150,000. Your equity percentage is 37.5% and your loan-to-value ratio is 62.5%.
What is loan-to-value (LTV) ratio?
Loan-to-value ratio (LTV) = Mortgage Balance / Home Value x 100. LTV is used by lenders to assess risk. A lower LTV means more equity and less risk. Most lenders require an LTV below 80% (meaning at least 20% equity) to avoid private mortgage insurance (PMI) on conventional loans.
How much equity do I need to refinance or borrow against my home?
For a cash-out refinance, most lenders require at least 20% equity after the refinance (80% LTV maximum). For a home equity loan or HELOC, lenders typically allow combined LTV up to 80 to 85%, meaning you can borrow against equity above that threshold. Requirements vary by lender and loan product.
How can I build home equity faster?
You can build equity faster by making extra mortgage principal payments, making a larger down payment, choosing a shorter loan term (15-year vs. 30-year), and through property value appreciation. Home improvements that increase market value also add equity, though not every dollar spent returns a dollar in value.
Official sources
- Consumer Financial Protection Bureau (CFPB): What is a Home Equity Loan?
- CFPB: What is a HELOC?
- Federal Housing Finance Agency (FHFA): House Price Index.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.