Clear Home Equity Calculator
Equity is the difference between what your home is worth and what you owe on it — and it decides how much you can borrow, whether you still pay PMI, and what you would actually walk away with after a sale. This shows the number four ways.
Use a realistic value — a recent appraisal, or a conservative read of online estimates, which can run optimistic. Lenders order their own appraisal for any loan against the home, and their number is the one that counts. The borrowable-room lines use combined loan-to-value (CLTV): most HELOCs cap total borrowing at 80–85% of value, some lenders go to 90% for strong borrowers.
How it works
Equity = home value − all balances secured by the home. Equity percentage = equity ÷ value. Combined loan-to-value = total balances ÷ value — the ratio lenders actually underwrite. Borrowable room at a CLTV cap = value × cap − balances already owed. The sale-proceeds line subtracts typical selling costs (agent commissions and closing, ~6–8% combined) so the "what I would actually keep" number is honest instead of flattering.
Formula & worked example
Formula: Equity = home value − total balances owed against it. Equity % = equity ÷ value. CLTV = total balances ÷ value. Borrowable room at a cap = value × cap (80% or 85%) − balances owed. Net sale proceeds = equity − selling costs (value × selling-cost %).
Worked example: $520,000 value − $312,000 owed = $208,000 equity (40.0%), a 60.0% CLTV, and $104,000 of room at an 80% cap.
When to use this
- A HELOC offer arrives and you want to know the room behind the marketing
- You are checking whether you have crossed 20% equity and can drop PMI
- You are weighing selling vs borrowing against the house for a major expense
- You want your net position in the home before a refinance conversation
How to use it, step by step
- Enter a conservative current value for the home.
- Add every balance secured by it — first mortgage, HELOC, second loans.
- Read your equity in dollars and as a percentage of value.
- Check borrowable room at the 80% and 85% CLTV caps lenders actually use.
- Look at the after-selling-costs line before counting equity as spendable.
- If room exists, price the borrowing with the HELOC vs Home Equity Loan comparison.
What the inputs mean
| Input | What it is | Typical values |
|---|---|---|
| Current home value | What the home would appraise or sell for today — be conservative. | Lender appraisals govern; online estimates can run optimistic |
| First mortgage balance | From your latest statement, not your original loan amount. | Include any refinance balance in full |
| Second loans / HELOC balance | Everything else secured by the home — it all counts against CLTV. | Drawn HELOC balance, not the credit limit |
| Selling cost % | Agent commissions plus closing costs if you sold instead. | 6–8% combined is the planning band |
Another worked example
The thin-equity case: a $380,000 home with a $355,000 first mortgage and a $20,000 HELOC balance owes $375,000 in total — just $5,000 of equity, 1.3% of the value. At the 80% CLTV cap ($304,000) there is no borrowable room at all: the home is already borrowed past the line. Selling would not cover typical selling costs, so the honest plan is time and amortization, not another loan.
Frequently asked questions
How much equity is in the default example?
A $520,000 home with a $312,000 mortgage holds $208,000 of equity — 40.0% of the value, a 60% loan-to-value. At an 80% CLTV cap there is $104,000 of borrowable room; at 85%, $130,000.
What is a good equity percentage to have?
Twenty percent is the classic milestone: it usually removes PMI on a conventional loan and unlocks the best HELOC and refinance pricing. Fifty percent or more means the home's value can fall substantially before you would owe more than it is worth.
Can I borrow against all of my equity?
Almost never. Lenders keep a cushion: total loans against the home typically cap at 80–85% of value (the CLTV limit), so on $208,000 of equity the accessible portion is more like $104,000–$130,000 here — and the amount you can actually service under income rules may be lower.
How do I build equity faster?
Three levers: time (each payment shifts slowly toward principal), extra principal payments (the Mortgage Payoff Calculator shows the interest they save), and value growth — which you do not control. Renovations help only to the extent buyers pay for them; the Repair vs Replace Calculator covers that math for big items.
What happens if my equity goes negative?
You owe more than the home would sell for — "underwater." Options narrow: most refinances and HELOCs close off, and selling requires bringing cash or a short sale. It is usually a reason to keep paying and let time and amortization work, not to panic-sell.
⚖️ Putting the equity to work?
Compare the two borrowing structures against each other — draw-period HELOC vs fixed installment loan, total cost of both.
How is equity different from my down payment?
The down payment was your equity on day one. Today's equity is that plus every dollar of principal you have paid down, plus or minus the market's movement in your home's value. Both forces compound quietly — which is why equity checks surprise people in both directions.
Does equity include what I spent on renovations?
Only to the extent the market values them. A $60,000 kitchen may add $35,000 of appraised value; the equity math uses the home's value, never your receipts. The Home Renovation Estimator and Repair vs Replace Calculator help judge which projects return their cost.