# Home Equity Calculator Calculate your current home equity, loan-to-value ratio, borrowing capacity, and projected equity after years of appreciation. --- - **Canonical URL:** https://dothecalculation.com/calculators/home-equity-calculator - **Category:** Real Estate & Property - **Publisher:** Do The Calculation (https://dothecalculation.com) - **Cost:** Free, no account or sign-up required - **Privacy:** Runs entirely in the browser; inputs are never sent to a server - **Methodology:** https://dothecalculation.com/methodology --- ## Home Equity Calculator Calculate exactly how much equity you have in your home today, your current loan-to-value ratio, how much a lender would likely let you borrow against it, and what your equity could look like after years of appreciation. - Current equity, LTV, and borrowing capacity in one place - Handles a second lien (HELOC or home equity loan) alongside your primary mortgage - Projects equity forward under a chosen appreciation rate ## Quick Answer — How Much Equity Do I Have? **Home equity = Current home value − Total mortgage balance(s)**. That's the whole calculation for the number itself. The more useful follow-up questions are your loan-to-value ratio (how leveraged you still are) and how much of that equity a lender would actually let you borrow. **Quick reference:** a $450,000 home with a $280,000 remaining primary mortgage has **$170,000 in equity** — a 62.2% loan-to-value ratio, meaning you own 37.8% of the home outright. Most lenders cap combined borrowing at 80-85% of home value, so on this example, a lender offering an 80% CLTV limit would allow borrowing up to $450,000 × 80% − $280,000 = **$80,000** against that equity, even though the raw equity figure is $170,000. That gap — $170,000 in equity but only $80,000 realistically borrowable — is the detail simple 'value minus balance' calculators skip, and it's the number that actually matters if you're considering a HELOC or home equity loan. ## How to Use This Calculator Enter your home's current estimated value, your primary mortgage balance, and any second lien balance (an existing HELOC or home equity loan) if applicable. Set a target loan-to-value percentage — 80% is the most common lender ceiling, though some lenders go to 85% or higher for well-qualified borrowers. Optionally, set an annual appreciation rate and a number of years to see a projected equity figure. **Worked example:** $450,000 home value, $280,000 primary mortgage, no second lien, 80% target LTV, 3% annual appreciation projected 5 years forward. Current equity = $450,000 − $280,000 = **$170,000**. Current LTV = $280,000 ÷ $450,000 = **62.2%**, meaning 37.8% equity. Maximum borrowable at 80% target LTV = ($450,000 × 80%) − $280,000 = $360,000 − $280,000 = **$80,000**. Projected value after 5 years at 3% annual appreciation = $450,000 × 1.03⁵ = **$521,673**. Assuming the mortgage balance stays roughly level (a simplification — see limitations below), projected equity = $521,673 − $280,000 = **$241,673**, or **46.3%** equity. **A second example, smaller balance:** $200,000 home value, $100,000 primary mortgage, no second lien, 85% target LTV, 4% appreciation over 10 years. Current equity = **$100,000** (a clean 50% LTV). Maximum borrowable = ($200,000 × 85%) − $100,000 = **$70,000**. Projected value after 10 years at 4% = $200,000 × 1.04¹⁰ = **$296,049**. Projected equity (balance held level) = $296,049 − $100,000 = **$196,049**, or **66.2%** equity — appreciation alone, with no extra principal payments, moved this homeowner from 50% to 66% equity over the decade. If you're considering actually borrowing against that equity, the [HELOC payment & draw calculator](/calculators/home-equity-line-of-credit-heloc-calculator) models the interest-only draw period and later repayment schedule on the borrowable amount this calculator shows. And if the reason you're tapping equity is to fund a renovation, check the [home renovation ROI calculator](/calculators/home-renovation-roi-calculator) first — it compares the project's cost against real 2026 resale-value benchmarks so you can see whether the borrowed amount is likely to come back at sale. ## The Formula This Calculator Uses **Total Mortgage Debt** = Primary mortgage balance + Second lien balance (if any). **Current Equity** = Home value − Total Mortgage Debt. **Current LTV %** = Total Mortgage Debt ÷ Home value × 100. **Equity %** = 100 − Current LTV %. **Maximum Borrowable** = MAX(0, (Home value × Target LTV %) − Total Mortgage Debt) — this is the standard lender formula for combined loan-to-value (CLTV) lending limits. **Projected Value** (after N years) = Home value × (1 + Appreciation rate %)ᴺ, using compound annual appreciation. **Projected Equity** = Projected Value − Total Mortgage Debt (holding the mortgage balance level — a simplification, not a full amortization schedule; see limitations). ## Why Equity and Borrowing Capacity Are Different Numbers It's tempting to think of 'equity' as 'money I could access,' but lenders don't lend against 100% of home value — they cap total borrowing (across your first mortgage and any second lien combined) at a maximum combined loan-to-value ratio, typically **80% to 85%** of appraised value. That cushion protects the lender against a market downturn and covers the costs of foreclosure and resale if a borrower defaults. This means a homeowner with substantial equity on paper can still have limited actual borrowing capacity if their current LTV is already close to the lender's ceiling. In the second worked example above, the homeowner has $100,000 in equity (50% of the home's value) but can only borrow $70,000 of it at an 85% CLTV limit — the other $30,000 is equity that exists on paper but isn't accessible through a standard home equity loan or HELOC at that lending threshold. This is also why home equity borrowing capacity moves for two completely independent reasons: paying down your mortgage principal (which most amortizing loans do slowly at first and faster later — see the [mortgage calculator](/calculators/mortgage-calculator) for a full amortization schedule) and home value appreciation, which is entirely market-driven and outside your control. ## Current HELOC Rates and Why They Matter Here As of August 2026, average HELOC rates sit around **7.3-7.5%**, moving with broader interest-rate conditions. That rate matters for this calculator indirectly: it's part of why lenders cap CLTV at 80-85% rather than higher — a variable-rate second lien on top of an existing mortgage is meaningfully riskier for both borrower and lender than a first mortgage alone, and the LTV cushion is the primary risk control. It's also worth knowing that home price appreciation has slowed significantly through 2026 relative to prior years — some markets saw average homeowner equity dip slightly year-over-year even as others continued to see gains, meaning the appreciation rate you choose for the projection above deserves real local research rather than defaulting to an optimistic historical average. ## What This Calculator Doesn't Account For The equity projection holds your mortgage balance level across the projection period, which understates real equity growth for anyone actively paying down an amortizing loan — principal payments build equity on top of appreciation, and this calculator's projection isolates the appreciation effect only, deliberately, to keep the two equity-growth mechanisms distinguishable. For a full year-by-year balance projection including principal paydown, use the [mortgage calculator](/calculators/mortgage-calculator) alongside this one. It also doesn't account for selling costs (typically 6-10% of sale price between agent commissions, closing costs, and repairs), which reduce the equity you'd actually walk away with in a sale scenario versus the raw on-paper figure calculated here. Home equity is also usually a household's single largest asset — if you're tracking it as part of your full financial picture rather than in isolation, the [net worth calculator](/calculators/net-worth-calculator) rolls it in alongside your other assets and debts. Finally, home values fluctuate, sometimes significantly, and this calculator's appreciation projection assumes a smooth, constant annual rate rather than the volatility real markets actually show — treat any multi-year projection as a planning estimate, not a guarantee. ## Frequently asked questions ### What's the difference between home equity and how much I can borrow? Home equity is simply home value minus mortgage debt. Borrowing capacity is capped by the lender's maximum combined loan-to-value ratio (typically 80-85%), so you often can't borrow 100% of your equity even though it's yours on paper. ### What is CLTV? Combined loan-to-value — the ratio of all liens against a property (primary mortgage plus any second lien like a HELOC) to the home's appraised value. Lenders use this to cap total borrowing, typically at 80-85%. ### Does this calculator account for paying down my mortgage principal? The equity projection isolates appreciation only and holds the mortgage balance level, to keep the two equity-growth mechanisms distinct. For a full amortization projection that includes principal paydown, pair this with the mortgage calculator. ### What appreciation rate should I use? Home price appreciation varies significantly by market and has slowed in 2026 relative to prior years in many areas. Research recent local trends rather than defaulting to a national historical average, which can overstate what your specific market will do. ### Why do lenders cap borrowing below 100% of equity? The gap between home value and the maximum loan amount protects the lender against market downturns and covers foreclosure and resale costs if a borrower defaults — it's a risk cushion, not an arbitrary limit. ### Should I include selling costs when thinking about my equity? If you're planning to sell, yes — this calculator shows on-paper equity, but selling typically costs 6-10% of sale price in commissions and closing costs, which reduces what you'd actually net. ## Related concepts - **Loan-to-value (LTV) ratio** — Total mortgage debt divided by home value, expressed as a percentage — the inverse of your equity percentage. - **Combined loan-to-value (CLTV)** — The LTV ratio counting all liens against a property together, used by lenders to cap total borrowing across a primary mortgage and any second lien. - **Home equity line of credit (HELOC)** — A revolving line of credit secured by home equity, typically with an interest-only draw period followed by a repayment period. ## Related guides - [Mortgage Guide: Payment Formula, Costs, and PMI](https://dothecalculation.com/blog/finance/mortgage-guide) — Understand how mortgage payments work, what the DTC mortgage calculator includes, and how taxes, insurance, PMI, and loan term affect cost. - [Home Affordability: Budget, Formula, and Calculator](https://dothecalculation.com/blog/finance/home-affordability-analysis) — Estimate a home-price range from income, debt, down payment, rate, taxes, and insurance, then test costs the DTC model does not include. ## Related calculators - [After Repair Value (ARV) Calculator](https://dothecalculation.com/calculators/after-repair-value-calculator) — Calculate ARV, the 70% rule maximum allowable offer, and projected flip profit from purchase price, repair budget, and selling costs. - [Loan to Value Calculator](https://dothecalculation.com/calculators/loan-to-value-calculator) — Calculate the loan-to-value ratio for mortgages, refinancing, and other financing to see lending risk and available equity. - [Commercial Debt Yield & DSCR Calculator](https://dothecalculation.com/calculators/debt-yield-commercial-calculator) — Calculate commercial mortgage debt yield, debt service coverage ratio, and maximum underwritten loan amount for commercial property financing. - [Home Renovation ROI Calculator](https://dothecalculation.com/calculators/home-renovation-roi-calculator) — Calculate the real return on a renovation project from cost, DIY savings, and expected resale value added, using 2026 Cost vs. Value benchmarks. - [Home Insulation R-Value & Savings Calculator](https://dothecalculation.com/calculators/home-insulation-savings-calculator) — Compare current insulation R-values with target R-values to estimate energy reduction, utility bill savings, and payback period. - [Podcast Download & CPM Calculator](https://dothecalculation.com/calculators/podcast-download-rate-calculator) — Calculate podcast CPM earnings, download-to-listener ratio, and projected sponsorship revenue to value your podcast advertising inventory. --- _This calculator is for educational and planning purposes. Actual home value requires a professional appraisal, and lender-specific CLTV limits, rates, and qualification criteria vary. Consult a mortgage lender before making borrowing decisions based on this estimate._ --- _Source: [Do The Calculation](https://dothecalculation.com/calculators/home-equity-calculator). Quote freely with attribution and a link to this page._