Home Equity Calculator
Find out how much equity you have in your home and how much you could potentially borrow.
Property Details
Projection Settings
Your Home Equity Summary
Current Equity
$150,000
42.9% of home value
Loan-to-Value Ratio
57.1%
Lower is better
Borrowing Potential
$80,000
Based on 80% LTV limit
Home Value
$350,000
Current market value
Equity Breakdown
Value Projection
What Home Equity Is
Home equity = your home's current value minus what you still owe on the mortgage. If your home is worth $400k and you owe $250k, you have $150k in equity.
It grows two ways: paying down your mortgage (each payment reduces the loan and increases equity) and property appreciation (as your home's value goes up, so does your equity). A 3% annual appreciation on a $400k home adds $12k/year to your wealth.
LTV (Loan-to-Value) ratio: Loan balance ÷ home value. $250k loan on a $400k home = 63% LTV. Lenders use this to decide if you can refinance or get a home equity loan. Most want you to keep at least 20% equity (80% LTV max).
Frequently Asked Questions
How much equity should I have before getting a home equity loan?
Most lenders want you to keep at least 20% equity after the loan. So your combined LTV (first mortgage + home equity loan) can't exceed 80% of your home's value.
Is home equity loan interest tax deductible?
Only if you use the money to "buy, build, or substantially improve" your home. If you use it for something else (like paying off credit cards), the interest isn't deductible. Talk to a tax pro.
What's the difference between equity and appreciation?
Equity = what you own (home value - loan balance). Appreciation = your home's value going up over time. Appreciation increases your equity, along with paying down your mortgage.
Can I access equity without selling?
Yes. Home equity loan (lump sum), HELOC (line of credit), cash-out refinance (new mortgage for more than you owe), or reverse mortgage (for seniors 62+). Each has different terms and rates.
How does the housing market affect my equity?
If home values go up, your equity goes up. If they go down, your equity can decrease. But paying down your mortgage always increases equity, regardless of market conditions.
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