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Home Equity Calculator

Results Summary

Estimated Home Equity $0

Equity Percentage 0%

Loan-to-Value (LTV) Ratio 0%

Borrowable Equity (80% LTV) $0

*Borrowable equity is an estimate based on standard 80% LTV lending limits.

function calculateEquity() { var homeVal = parseFloat(document.getElementById('homeValue').value); var balance = parseFloat(document.getElementById('mortgageBalance').value); var liens = parseFloat(document.getElementById('otherLiens').value) || 0; if (isNaN(homeVal) || isNaN(balance) || homeVal <= 0) { alert("Please enter valid positive numbers for Home Value and Mortgage Balance."); return; } var totalDebt = balance + liens; var equity = homeVal – totalDebt; var equityPercent = (equity / homeVal) * 100; var ltv = (totalDebt / homeVal) * 100; // Standard borrowable amount (80% of value minus existing debt) var maxLTVAmount = homeVal * 0.80; var borrowable = maxLTVAmount – totalDebt; if (borrowable < 0) { borrowable = 0; } document.getElementById('resultEquity').innerText = '$' + equity.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('resultPercent').innerText = equityPercent.toFixed(1) + '%'; document.getElementById('resultLTV').innerText = ltv.toFixed(1) + '%'; document.getElementById('resultBorrowable').innerText = '$' + borrowable.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('equity-results').style.display = 'block'; }

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Understanding Your Home Equity

Home equity represents the portion of your property that you truly "own." It is the difference between the current fair market value of your home and the total amount you owe on any mortgages or liens attached to the property. As you pay down your mortgage principal and as property values in your area rise, your equity increases.

How Home Equity is Calculated

The mathematical formula for home equity is straightforward:

Home Equity = Current Market Value – Total Outstanding Debt

Total outstanding debt includes your primary mortgage, secondary mortgages (second positions), and any Home Equity Lines of Credit (HELOC) or tax liens.

Key Terms Explained

• Loan-to-Value (LTV) Ratio: This is a measure used by lenders to compare the amount of your mortgage to the value of the home. An LTV of 80% means you owe 80% of the value and have 20% equity.
• Market Value: Not what you paid for the house, but what a buyer would pay for it today based on current market conditions and comparable sales.
• Borrowable Equity: Most banks allow you to borrow up to 80% or 85% of your home's total value. The difference between that limit and your current debt is what you can potentially access via a loan.

Example Calculation

Imagine your home is currently worth $500,000. You have a mortgage balance of $300,000 and no other debts on the property.

• Total Equity: $500,000 – $300,000 = $200,000.
• Equity Percentage: ($200,000 / $500,000) = 40%.
• Borrowable Equity (at 80% LTV): ($500,000 * 0.80) – $300,000 = $100,000.

Why Tracking Equity Matters

Equity is a powerful financial tool. You can use it to secure low-interest loans for home renovations, consolidate high-interest debt, or provide a safety net for major life expenses. Additionally, once your equity surpasses 20%, you may be eligible to remove Private Mortgage Insurance (PMI), which can save you hundreds of dollars every month.