Calculate your current home equity and the equity percentage based on your home's estimated value and outstanding mortgage balance.
Your Home Equity
What is Home Equity?
Home equity is the difference between your home's current market value and the amount you owe on your mortgage(s). It represents the portion of your home that you truly own, free and clear of debt. As you pay down your mortgage principal or as your home's value increases, your equity grows.
How the Mortgage Equity Calculator Works
This calculator simplifies the process of determining your home equity. It takes two key pieces of information:
Estimated Home Value: This is what your home could realistically sell for on the current market. You can get this estimate from recent sales of comparable homes in your area, professional appraisals, or online valuation tools.
Outstanding Mortgage Balance: This is the total amount you still owe to your lender(s) on all mortgages secured by the property.
The calculation is straightforward:
Home Equity = Estimated Home Value – Outstanding Mortgage Balance
Additionally, the calculator determines your equity as a percentage of your home's value:
Understanding your home equity is crucial for several financial decisions:
Home Equity Loans/Lines of Credit: Lenders often base loan amounts on your available equity. A higher equity position can give you access to more borrowing power.
Refinancing: Your equity plays a role in whether you'll be approved for a mortgage refinance and what terms you might receive.
Selling Your Home: Knowing your equity helps you estimate the net proceeds you'll receive after paying off the mortgage and closing costs.
Financial Planning: Equity is a significant asset on your personal balance sheet.
Loan-to-Value Ratio (LTV): Your equity is inversely related to the LTV ratio, a key metric lenders use. A lower LTV (meaning higher equity) is generally favorable.
This means you have $350,000 in equity, representing 58.33% of your home's value.
Important Considerations
Remember that the "Estimated Home Value" is a projection. Actual market value can fluctuate. Property taxes, potential selling costs (real estate agent commissions, closing fees), and any other liens on the property are not factored into this basic equity calculation but are important when assessing net proceeds from a sale.
var calculateEquity = function() {
var homeValue = parseFloat(document.getElementById("homeValue").value);
var mortgageBalance = parseFloat(document.getElementById("mortgageBalance").value);
var resultDiv = document.getElementById("result");
var resultValueSpan = document.getElementById("result-value");
var resultPercentageSpan = document.getElementById("result-percentage");
if (isNaN(homeValue) || isNaN(mortgageBalance) || homeValue <= 0 || mortgageBalance homeValue) {
alert("The mortgage balance cannot be greater than the estimated home value.");
resultDiv.style.display = 'none';
return;
}
var equity = homeValue – mortgageBalance;
var equityPercentage = (equity / homeValue) * 100;
resultValueSpan.textContent = "$" + equity.toLocaleString('en-US', { minimumFractionDigits: 0, maximumFractionDigits: 0 });
resultPercentageSpan.textContent = equityPercentage.toFixed(2) + "% Equity";
resultDiv.style.display = 'block';
};