Home Equity Calculator
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About Home Equity
Equity is ownership you've accumulated two ways — principal payments and price appreciation — and it's most households' largest asset. Borrowing against it is cheaper than any unsecured credit precisely because the house itself backs the debt, which is both the feature and the warning.
Enter your home's realistic market value (recent comparable sales beat wishful listings), the mortgage balance, and the lender's LTV cap. You get total equity, your current LTV, and the borrowable figure — the number a home-equity loan or HELOC application will actually orbit.
Replacing the whole mortgage rather than borrowing on top? That's the Refinance Calculator
The LTV Math
Two subtractions, one cap:
Total equity = home value − mortgage balance Available = value × LTV cap − mortgage balance Current LTV = balance ÷ value
Worked example: $400,000 home, $220,000 owed → $180,000 total equity at 55% LTV. An 80%-cap lender allows combined debt of $320,000, so $100,000 is borrowable. At a 90% cap the figure rises to $140,000 — and so does the risk stack.
Equity vs Borrowable
A $400,000 home at different payoff stages (80% cap) — computed by this calculator:
| Mortgage balance | Total equity | Current LTV | Borrowable (80%) |
|---|---|---|---|
| $360,000 | $40,000 | 90% | $0 — above the cap |
| $320,000 | $80,000 | 80% | $0 — at the cap |
| $280,000 | $120,000 | 70% | $40,000 |
| $220,000 | $180,000 | 55% | $100,000 |
| $120,000 | $280,000 | 30% | $200,000 |
| $0 (paid off) | $400,000 | 0% | $320,000 |
The top rows explain post-purchase disappointment: young mortgages sit near the cap, so 'all that equity' is real but locked until principal falls or value rises.
Loan vs HELOC, and the Collateral Truth
Two vehicles for the same equity: a home-equity loan delivers a lump sum at a fixed rate and payment (right for one-time known costs — a renovation bid, consolidation), while a HELOC opens a variable-rate credit line you draw as needed (right for staged projects and standby liquidity), typically with a draw decade before repayment begins. Rates run above first mortgages, far below unsecured debt.
The sentence that belongs in bold: either product makes your home the collateral — default risks foreclosure, which is a different universe from defaulting on a credit card. Equity borrowing for appreciating purposes (renovations, consolidation with the cards then closed) has logic; equity into vacations and vehicles converts your house into consumption. And falling home prices can trap borrowers above the cap — 2008's signature injury.
Frequently Asked Questions
How much equity can I borrow?
Home value × the lender's LTV cap (usually 80%) minus your mortgage balance: $400k × 80% − $220k = $100,000 — noticeably less than the $180k of total equity. Higher-cap lenders exist at higher rates.
What's the difference between equity and available equity?
Equity is value minus debt — yours in full when you sell. Available equity is what lenders let you BORROW while keeping the house: capped at 80–90% combined LTV as their price-drop cushion. The gap between the two is the table above.
Home-equity loan or HELOC?
Loan: lump sum, fixed rate, fixed payment — suits a known one-time cost. HELOC: draw-as-needed line, variable rate — suits staged spending and standby access. Same collateral, same cap; the shape of your need decides.
How do I know my home's value?
Recent sales of comparable nearby homes are the anchor; online estimates vary widely. The lender will order an appraisal anyway — running this calculator at a conservative value now prevents application-stage surprises.
Does a HELOC affect my mortgage?
Your first mortgage continues unchanged — equity products sit behind it as second liens (which is why their rates run higher; second position eats losses first in foreclosure). Combined payments and combined LTV are what your budget and the cap must absorb.
Is borrowing equity to invest a good idea?
It's leverage on your shelter — losses come with foreclosure exposure attached. The honest framing: would you mortgage the house to buy that asset outright? Renovation that adds value has a real case; market speculation with the roof over your head rarely does.
Methodology. This calculator uses standard financial formulas used across the industry. It is reviewed and maintained by the Vast Calculators editorial team.
Last updated · July 11, 2026
Disclaimer. This tool provides estimates for general informational purposes only and is not a substitute for professional financial advice. Always consult a qualified financial advisor before making decisions about your finances.