Understanding Home Equity
Home equity is the portion of your home's value that you truly own. It is calculated by subtracting your remaining mortgage balance from your home's current market value.
As you make mortgage payments and your home's value increases, your equity generally grows. Homeowners often track their equity because it represents an important part of their personal net worth and may provide access to financing options such as home equity loans or home equity lines of credit (HELOCs).
This Home Equity Calculator provides a quick estimate of how much equity you have in your property. Simply enter your home's current value and the amount remaining on your mortgage to calculate the difference.
Knowing your home equity can help you:
Estimate your ownership stake in your property
Evaluate refinancing opportunities
Understand your overall financial position
Estimate how much equity may be available for borrowing
Track your progress toward fully owning your home
Keep in mind that this calculator provides an estimate only. Your home's actual market value may differ from recent appraisals or online estimates, and lenders may apply additional requirements when determining how much equity can be accessed through a loan or line of credit.
For the most accurate results, use your latest mortgage balance and a realistic estimate of your home's current market value.
About
Home Equity Calculator version 1.5
Written by Nicholas Tsakiris Alston
Frequently Asked Questions
What is home equity?
Home equity is the difference between the current market value of your home and the amount you still owe on your mortgage.
How do I calculate home equity?Subtract your remaining mortgage balance from your home's current value. For example, if your home is worth $400,000 and you owe $250,000, your home equity is $150,000.
Can home equity be negative?Yes. Negative equity happens when you owe more on your mortgage than your home is currently worth.
Why does home equity matter?Home equity can help you understand your net worth, estimate how much of your home you truly own, and decide whether refinancing, selling, or borrowing against your home may make sense.
Does this calculator include closing costs or loan fees?No. This calculator gives a simple estimate based on home value and mortgage balance. Actual available equity may be lower after closing costs, lender limits, taxes, or fees.
Can I borrow all of my home equity?Usually no. Lenders often limit how much equity you can borrow against. Many home equity loans and lines of credit require you to keep a percentage of equity in the home.
How accurate is the result?The result is only as accurate as the numbers you enter. Your home's market value can change, and your mortgage balance should be checked against your latest loan statement.
Home Equity Formula
Home Equity Formula
Home Equity = Home Value − Mortgage Balance
Where:
Home Value is the current market value of the property.
Mortgage Balance is the remaining amount owed on the mortgage.
The result represents the amount of the home's value that belongs to the homeowner rather than the lender.
Examples
Example 1
Home Value: $400,000
Mortgage Balance: $250,000
Home Equity: $150,000
Home Value: $600,000
Mortgage Balance: $450,000
Home Equity: $150,000
Home Value: $300,000
Mortgage Balance: $350,000
Home Equity: -$50,000
A negative result means the homeowner owes more than the property is currently worth.