Calculator
Home Equity Calculator
Find out how much equity you have in your home and how much you could potentially borrow with a HELOC or home equity loan. Enter your home’s current value and mortgage balance.
TL;DR — Home Equity
Home Equity = Home Value − What You Owe. You can typically borrow up to 80-85% of your home’s value minus your mortgage balance. So if your home is worth $400K and you owe $280K, you have $120K equity and could borrow around $40K with an 80% LTV limit.
Calculate Your Home Equity
Enter your home’s estimated value and what you owe.
Use Zillow, Redfin, or a recent appraisal for an estimate
Find this on your mortgage statement or lender portal
Second mortgages, HELOCs, or home equity loans
Most lenders cap borrowing at 80–85% of home value
Your Home Equity Summary
Understanding Your Home Equity
Home equity is the portion of your home that you actually own — the difference between your home’s current market value and what you still owe on your mortgage and any other liens.
Formula: Home Equity = Home Value − Mortgage Balance − Other Liens
What is Borrowable Equity?
Lenders don’t let you borrow 100% of your equity. Most require you to keep 15–20% equity in your home, limiting your combined loan-to-value (CLTV) ratio to 80–85%.
Formula: Borrowable Equity = (Home Value × LTV Limit) − Mortgage Balance − Other Liens
Example
If your home is worth $400,000 and you owe $280,000, you have $120,000 in equity. With an 80% LTV limit, you could borrow up to $40,000: ($400,000 × 0.80) − $280,000 = $40,000.
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Ways to Use Your Home Equity
Home equity can be accessed through several loan products:
Home Equity Line of Credit (HELOC)
- Revolving credit line — borrow as needed
- Variable interest rates (currently 8–10%)
- Good for ongoing projects or flexible needs
Home Equity Loan
- Lump-sum loan with fixed rate
- Fixed monthly payments (currently 8–9%)
- Good for one-time large expenses
Cash-Out Refinance
- Replace your mortgage with a larger one
- Receive the difference in cash
- Good when rates are lower than your current mortgage
Important
HELOCs and home equity loans use your home as collateral. If you can’t make payments, you risk foreclosure. Only borrow what you can comfortably repay.
Home Equity FAQ
How do I find my home’s current value?
Use online estimators like Zillow, Redfin, or Realtor.com for a ballpark. For a more accurate number, get a professional appraisal ($300–$500) or a comparative market analysis from a real estate agent (often free). Lenders will do their own appraisal during the loan process.
How much equity do I need to borrow?
Most lenders require at least 15–20% equity remaining after the loan. So if you have 30% equity, you could typically borrow about 10–15% of your home’s value. Some lenders allow up to 90% CLTV for qualified borrowers.
What’s the difference between LTV and CLTV?
LTV (loan-to-value) is your first mortgage divided by home value. CLTV (combined LTV) includes all loans secured by your home—first mortgage plus any HELOCs or home equity loans. Lenders use CLTV to determine how much more you can borrow.
Is a HELOC or home equity loan better?
HELOCs offer flexibility—borrow what you need, when you need it, with variable rates. Home equity loans give you a lump sum with predictable fixed payments. Choose HELOC for ongoing needs, home equity loan for one-time expenses.
Can I use home equity for home improvements?
Yes—and it’s one of the most common uses. Home improvements may also make the interest tax-deductible (consult a tax professional). Plus, strategic improvements can increase your home’s value by more than they cost.
What credit score do I need for a home equity loan?
Most lenders require a minimum credit score of 620-680 for home equity products. Higher scores (700+) qualify for better rates. Some lenders may go lower with compensating factors like high equity or income.
Are home equity products better than personal loans?
Home equity products typically have lower rates (8-10% vs 10-15%+) because they’re secured by your home. However, personal loans are faster to close, don’t require an appraisal, and don’t put your home at risk if you can’t pay.
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