Calculate Home Equity

Home equity is the difference between your home's current market value and the remaining balance on your mortgage.

Many people tap into their home equity to:

• tackle home improvement projects
• make a large purchase
• pay off debt

Your home equity — and your loan-to-value ratio (LTV) — determines your eligibility for home equity loans, HELOCs, and cash-out refinancing.

How Do I Calculate My Home Equity?

The formula: Home Value – Mortgage Balance = Home Equity

Let's say your home is valued at $300,000 and you owe $200,000 on your mortgage.

$300,000 (Home Value) – $200,000 (Mortgage Balance) = $100,000 Home Equity

Get that number even faster with our home equity calculator.

How Do I Find My Home's Current Value?

To calculate your equity, you'll need a reliable estimate of your home's market value.

Two common ways to find it:

1. Websites like Zillow or Redfin give quick, accessible estimates.
2. Get a professional appraisal – the most accurate method and typically required during the loan process.

Where Do I Find My Mortgage Balance?

Your remaining mortgage balance can be found on your monthly mortgage statement or through your lender's digital banking platform. This number decreases gradually as part of each payment goes toward your loan principal.

What Is Loan-to-Value Ratio (LTV)?

Loan-to-value ratio (LTV) helps lenders measure the risk of extending credit. A lower LTV means you own more of your home relative to its value, which typically makes borrowing more affordable.

How Do I Calculate My LTV?

The formula: Mortgage Balance ÷ Home Value = LTV

Using the same example from above:

$200,000 (Mortgage Balance) ÷ $300,000 (Home Value) = .667 or 66.7% LTV

Note: If you're seeking a home equity line of credit or cash-out refinance, the LTV math will change. You'll add the amount you wish to borrow onto your remaining mortgage balance and your LTV will increase.

Say you want to tackle a home project you expect to cost $25,000. Using the same numbers as before, our new calculation is:

$225,000 (Mortgage Balance + Amount You Wish to Borrow) ÷ $300,000 (Home Value) = .75 or 75% LTV

In this case, assuming the borrower meets other requirements, the loan would likely be approved. Lenders typically cap LTV around 85%. If your LTV is less than that, you're more likely to be approved.

Some borrowers may need private mortgage insurance (PMI) at higher LTVs.

How Can I Build More Home Equity?

1. Make your regular mortgage payments. Each payment reduces your principal and grows your equity over time.
2. Make extra payments (if allowed). Putting more than the required monthly payment toward principal accelerates equity growth and can shorten your loan term. Check with your lender about prepayment penalties.
3. Increase your home's value. Maintain your home's condition – or make smart improvements – to boost your appraisal value and increase equity.

Does home equity always increase over time?

No. Equity rises as you pay down principal, but market conditions can influence home values up or down.

Can I use equity if I'm still paying off my mortgage?

Yes. Home equity loans and HELOCs are specifically designed for homeowners who still have an active mortgage.

Still have questions about home equity?

It's helpful to talk to someone who puts you and your financial well-being first. Get in touch with one of our home equity experts or schedule an appointment today.

We'll work together to determine if using your home equity is the right move for you.