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Home Equity Calculator

Calculate your home equity, loan-to-value ratio, and equity percentage. Understand how much of your home you truly own and how much borrowing power you have.

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How to Use This Calculator

Home equity is the difference between your home's current market value and the total amount you owe on all mortgages and liens against it. This calculator helps homeowners understand their financial position by computing three key metrics: total equity in dollars, equity as a percentage of home value, and the loan-to-value (LTV) ratio that lenders use to evaluate borrowing risk. Your home equity grows in two ways: as you make mortgage payments that reduce your principal balance, and as your property appreciates in value over time. Equity is important because it determines your ability to borrow against your home through a HELOC or home equity loan, whether you need private mortgage insurance (PMI is typically required when LTV exceeds 80%), and how much cash you would walk away with if you sold. Tracking your equity over time is a key part of personal financial planning. Many homeowners are surprised to learn they have built substantial equity, especially in markets where property values have risen significantly. Use this calculator alongside our mortgage payment and home affordability tools to get a complete picture of your housing finances.

Frequently Asked Questions

How is home equity calculated?
Home equity equals your home's current market value minus all outstanding mortgage balances and liens. If your home is worth $400,000 and you owe $250,000, your equity is $150,000 (37.5%). Equity increases as you pay down your mortgage and as your home appreciates in value.
What is a good loan-to-value (LTV) ratio?
An LTV of 80% or less is generally considered good because it means you have at least 20% equity. This threshold eliminates the need for private mortgage insurance (PMI) and gives you access to the best refinancing rates. LTV below 60% is excellent and maximizes your borrowing options for home equity loans or HELOCs.
How can I build home equity faster?
Make extra principal payments on your mortgage, even small additional amounts each month. Choose a shorter loan term (15 years vs 30 years) to pay down principal faster. Make home improvements that increase your property value. Avoid taking on additional home debt like HELOCs unless absolutely necessary. Over time, natural property appreciation also builds equity.

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