Home Equity & LTV Calculator
Calculate your available equity and maximum borrowable amount based on Loan-to-Value (LTV) ratios.
Please enter valid positive numbers for all fields.
Total Home Equity
$0.00
Maximum Loan Amount (at LTV Limit)
$0.00
Available Cash Out / HELOC Limit
$0.00
Current LTV Ratio
0%
How to Calculate Your Home Equity
Home equity is the difference between the fair market value of your property and the outstanding balance of all liens on the property (like your mortgage). Understanding your equity is the first step in applying for a Home Equity Line of Credit (HELOC) or a Home Equity Loan.
The Importance of LTV (Loan-to-Value)
Lenders use the Loan-to-Value ratio to determine risk. Most traditional lenders allow you to borrow up to 80% or 85% of your home's value. For example, if your home is worth $500,000, an 80% LTV limit means the total debt on the house (primary mortgage + new loan) cannot exceed $400,000.
Realistic Example:
If your home is valued at $400,000 and you owe $250,000:
1. Total Equity = $400,000 – $250,000 = $150,000.
2. Max Debt at 80% LTV = $400,000 × 0.80 = $320,000.
3. Available Cash = $320,000 – $250,000 = $70,000.
If your home is valued at $400,000 and you owe $250,000:
1. Total Equity = $400,000 – $250,000 = $150,000.
2. Max Debt at 80% LTV = $400,000 × 0.80 = $320,000.
3. Available Cash = $320,000 – $250,000 = $70,000.
Factors That Influence Borrowing Power
- Appraisal Value: Professional appraisals often differ from Zillow estimates.
- Credit Score: Higher scores may unlock higher LTV limits (up to 90% in some cases).
- Debt-to-Income (DTI): Even if you have equity, your monthly income must support the new payments.
- Market Volatility: In declining markets, lenders may tighten LTV requirements to 70% or 75%.