Home Equity Calculator
See how much equity you have and how much you could borrow against it.
Updated · By Teodor-Cristian Lutoiu
Home equity = current home value − mortgage balance. Lenders will let you borrow against it up to a combined loan-to-value (CLTV) cap — usually 80–85% for HELOCs and cash-out refinances; 90% and 95% exist but are rare and priced higher.
Fill in home value and mortgage balance to see your equity.
0 of 2 filled in.
See also
How home equity works
Home equity is the gap between what your home is worth and what you still owe on it. Simple math, but the number has real consequences: it determines how much you can borrow against the property, how much you'd walk away with if you sold, and whether you're in a position to refinance out of PMI.
Two numbers every homeowner should know:
- Equity dollars = home value − mortgage balance. The amount you'd pocket (minus closing costs and selling costs) if you sold the house today.
- Equity percent / LTV = mortgage balance ÷ home value. Lenders care about this. Below 80% LTV unlocks better refi rates, PMI removal, and HELOC eligibility.
How lenders cap your borrowing
When you apply for a HELOC, home equity loan, or cash-out refinance, the lender looks at Combined Loan-to-Value (CLTV): your first mortgage plus whatever new loan you're asking for, divided by the home value. Standard caps in 2026:
- 80% CLTV — conservative cash-out refi or conventional HELOC. Easiest approval, best rates.
- 85% CLTV — common ceiling for standard HELOCs at decent credit (700+).
- 90% CLTV — aggressive HELOC territory, strong-credit borrowers only (740+ FICO, low DTI).
- 95% CLTV — rare home equity loans at credit unions or specialty lenders; expect higher rates.
Your maximum borrowable is the gap between the CLTV cap and your current mortgage balance:
Max borrow = (Home Value × CLTV cap) − Current Mortgage Balance
If your current balance already exceeds the cap (e.g., you're at 87% LTV and asking about 80% refi), the answer is negative — you'd have to bring cash to the table, not take it out.
Formula
equity_dollars = home_value − mortgage_balance
equity_percent = equity_dollars ÷ home_value
current_ltv = mortgage_balance ÷ home_value
max_borrowable = max(0, (home_value × cltv_cap) − mortgage_balance)
The formula assumes a current home value. If you haven't had an appraisal recently, use one of:
- A recent Zillow / Redfin / Realtor.com "Zestimate" as a starting point (typically within 5-10% of reality, sometimes off further)
- Recent sales of similar homes on your street (the most reliable free source)
- A formal appraisal ($400-600) — required by lenders anyway for any loan over a certain amount
Scenarios at a glance
Borrowable against a $500,000 home with a $300,000 mortgage ($200,000 raw equity):
| CLTV cap | Max combined debt | Current mortgage | Borrowable |
|---|---|---|---|
| 80% | $400,000 | $300,000 | $100,000 |
| 85% | $425,000 | $300,000 | $125,000 |
| 90% | $450,000 | $300,000 | $150,000 |
| 95% | $475,000 | $300,000 | $175,000 |
"Raw equity" ($200k) and "borrowable" ($100k at 80% CLTV) are different numbers — the lender caps total debt, not just the new loan.
Worked example
Maria bought a townhouse six years ago for $340,000 with 10% down. Since then, prices in her neighborhood have appreciated and she's paid down principal:
- Current home value (per two recent comp sales): $425,000
- Current mortgage balance: $265,000
- She's considering a HELOC for kitchen renovation
Using the calculator:
- Equity: $425,000 − $265,000 = $160,000
- Equity percent: 37.6% of home value
- Current LTV: 62.4% (well below 80%, so PMI shouldn't apply anymore)
- Max borrowable at 85% CLTV: ($425,000 × 0.85) − $265,000 = $361,250 − $265,000 = $96,250
Maria could borrow up to $96,250 via a standard HELOC. For the $40,000 kitchen, that's well within her ceiling. Her CLTV after drawing $40k would be ($265,000 + $40,000) ÷ $425,000 = 71.8% — still below the 80% threshold that triggers most lender concerns.
FAQ
What's the difference between equity and home value?
Home value is what the property is worth on the open market. Equity is the portion you own — value minus what the lender is still owed. If your home is worth $500k and you owe $300k on the mortgage, the home's value is $500k but your equity is $200k.
How do I know my current home value without paying for an appraisal?
Start with the Zillow/Redfin/Realtor.com estimates, then check recent sales of 3-5 similar homes within a quarter mile of yours in the last 3-6 months. County assessor records are public in most states. Online estimates are usually within 5-10% of a real appraisal in average markets; they're less reliable for unusual properties.
Does the IRS care about my equity?
Not while you own the home. When you sell, any gain above $250k (single) or $500k (married filing jointly) may be taxable as capital gains, assuming the home was your primary residence for at least 2 of the last 5 years. Equity you've built by paying down principal is not taxed — only appreciation above those exclusions.
Is a HELOC or a cash-out refi better?
Depends on how much you need, for how long, and where rates are now. A HELOC is a revolving line — take what you need, pay interest only on the drawn amount, variable rate. A cash-out refi replaces your whole mortgage with a bigger one at today's rate — fixed, but if your current rate is low, you'd be giving that up. Rule of thumb in 2026: if your existing mortgage rate is under 5%, do a HELOC; if above 7%, consider a cash-out refi.
Do home equity loans require an appraisal?
Usually yes for anything over $100k or when current LTV is close to the cap. Lenders may accept an automated valuation model (AVM) for smaller loans or low-LTV situations.
What happens if my home value drops?
Your equity drops with it. If the market falls 10%, a $500k home becomes a $450k home, and $50k of equity disappears. This is why lenders cap CLTV: a 95% CLTV loan gets dangerously close to "underwater" territory after any meaningful correction.
Last updated: April 23, 2026