This home equity calculator finds what you actually own of your home: current equity, loan-to-value (LTV), and how much equity lenders will typically let you borrow against at common LTV caps.
Equity ≠ borrowable: lenders cap combined LTV (mortgage + new loan) so a cushion remains theirs. Borrowing against the cap converts your cushion into a second lien on the same roof — the interest may be cheaper than unsecured debt, but the collateral is your home, which is why the decision deserves the Refinance Calculator’s cold eye too.
Equity = Value − Owed; Borrowable = (Cap × Value) − Owed
Two subtractions run the entire home-equity market. The first defines your wealth share; the second defines the lender’s risk share, computed against the combined-LTV caps detailed on our LTV Calculator. Equity grows three ways: principal payments, appreciation, and improvements that appraise — only the first is guaranteed. Part of our Finance Calculators collection.
Worked Example (Verified)
- $500k home, $300k owed (defaults): equity $200k (40%), LTV 60% → at an 80% cap, borrowable = 400k − 300k = $100k — half the equity, by design
- The appreciation effect: the same house at $550k lifts equity to $250k and borrowable to $140k without a single extra payment — paper wealth, real borrowing power, equal risk in a downturn
- Underwater check: value $280k vs owed $300k → equity −$20k, LTV 107% — no lender borrows against that, and the calculator says so plainly (borrowable $0)
- PMI’s exit lives here too: crossing 80% LTV by value or payments is the threshold our PMI Calculator prices
Before Borrowing Against It
- HELOCs are variable-rate and often interest-only for a draw period — the payment shock arrives on schedule; model it, don’t discover it.
- Second liens survive your good intentions: default risks the home regardless of which loan you stopped paying first.
- Appraisal governs: the lender’s valuation, not your estimate or a website’s, sets “value” in both formulas.
- Closing costs (2–5% on home-equity loans; HELOCs often less) eat the rate advantage on small, short borrowings — compare total cost, not APR alone.
Related Tools
- LTV Calculator — loan-to-value in depth
- PMI Calculator — the cost of being above 80%
- Finance Calculators — the full collection
Frequently Asked Questions
How do I calculate my home equity?
Current market value minus everything you owe against the home (first mortgage, second liens, HELOC balance). $500,000 − $300,000 = $200,000 of equity, a 40% ownership share and 60% LTV. This calculator adds the borrowable amount at standard LTV caps.
How much equity can I borrow?
Typically up to an 80% combined LTV with HELOCs (some lenders go 85–90% on fixed home-equity loans at higher rates): on the defaults, 80% of $500k = $400k total debt allowed, minus $300k owed = $100k borrowable. Credit score, income and appraisal all gate the final approval.
Home equity loan vs HELOC — what’s the difference?
A home equity loan is a lump sum at a fixed rate with fixed payments. A HELOC is a revolving credit line (usually variable rate) you draw and repay flexibly during a draw period, then amortize. Same collateral and equity math — which feeds this page — different cash-flow shapes and rate risks.
Does paying down my mortgage increase borrowable equity?
Yes, dollar for dollar, on both lines: every principal dollar adds a dollar of equity and a dollar of borrowable room under the cap — until appreciation or a new appraisal changes the value side. It’s the slowest but surest equity builder.
Can I have negative equity?
Yes (“underwater”): value below total owed. The calculator shows it honestly — negative equity, LTV over 100%, borrowable $0. Options narrow to paying down, waiting for value recovery, or (in hardship) lender-negotiated solutions; borrowing more is off the table by arithmetic.
Is this home equity calculator free?
Yes — free, instant, no sign-up.