Home Equity Calculator
See exactly how much of your home you actually own, and roughly how much you could borrow against it.
Your numbers
Your Home Equity
$120,000
30.0% of home value
- CCopy result
- DDownload PDF
- SSave this calculation
- HToggle history
- ?Show this panel
- EscClose open panel
Disabled while typing in a field.
Last updated: August 17, 2026 · Reviewed by the DoCalc team
What Is Home Equity?
Home equity is the portion of your home's value you actually own outright — current market value minus everything you still owe against it. It grows two ways: paying down your mortgage principal over time, and your home's market value appreciating (or shrinks if home values fall). It's one of the biggest components of net worth for most homeowners, and the basis for how much you could borrow via a HELOC or cash-out refinance.
The Formula
Loan-to-value (LTV) is the inverse view of the same number — lenders use it heavily to decide how much more you can borrow, since most cap total borrowing (combined loan-to-value, or CLTV) around 80-85% of home value.
Worked Example
A home now worth $400,000 with a $280,000 remaining mortgage balance has $120,000 in equity — 30% of the home's value, with an LTV of 70%. Since most lenders cap combined borrowing around 80% CLTV, roughly $40,000 ($400,000 × 80% − $280,000) could potentially be borrowed via a HELOC or home equity loan, subject to credit and income qualification.
How Equity Typically Builds Over Time
| Source | How it builds equity |
|---|---|
| Principal paydown | Every mortgage payment includes some principal, directly increasing equity — see the Mortgage Amortization Calculator |
| Appreciation | Rising market value increases equity even with no extra payments — see the Home Appreciation Calculator |
| Extra payments | Accelerates principal paydown beyond the required minimum |
| Home improvements | Can increase market value, though not dollar-for-dollar with renovation cost |
Pros and Cons of Borrowing Against Equity
Pros: home equity loans and HELOCs typically offer lower interest rates than unsecured debt, since the loan is secured by your home.
Cons: your home is collateral — failure to repay can risk foreclosure, and borrowing against equity reduces the cushion you have if home values decline.
Who Should Use This Calculator
Use it if you're considering a HELOC, home equity loan, or cash-out refinance and want a quick estimate of your borrowing capacity. Confirm with a lender before assuming any specific amount — actual approval depends on credit score, income, and the lender's specific LTV limits.
Frequently Asked Questions
How is home equity calculated?
Current home value minus everything you still owe against it (mortgage balance plus any other liens like a HELOC). The result is the portion of the home's value you actually own free and clear.
What does LTV mean?
Loan-to-value — the percentage of your home's value that's still financed. A 70% LTV means 70% of the home's value is owed, and 30% (your equity) is owned outright.
How much of my equity can I actually borrow?
Most lenders cap combined borrowing (all liens together) around 80-85% of home value, though this varies by lender and loan product. Actual approval also depends on your credit score and income.
Does paying extra on my mortgage build equity faster?
Yes — any extra principal payment directly increases your equity by the same amount, on top of whatever your regular payments and any market appreciation contribute.
What happens to my equity if home values drop?
Your equity decreases (or could go negative — "underwater" — if the mortgage balance exceeds the home's value), even though your mortgage balance itself hasn't changed. This is a real risk during market downturns.
Is a HELOC the same as home equity?
No — a HELOC is a line of credit that borrows against your equity. Your equity is the underlying asset value; a HELOC is one way to access some of it as cash.