Home Equity Calculator
Calculate your current home equity, equity gain since purchase, and maximum HELOC or cash-out refinance amount.
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How to use this calculator
- 1
Enter your home's current market value (from a recent appraisal or comparable sales).
- 2
Enter the original purchase price and your remaining mortgage balance.
- 3
Set the maximum LTV your lender allows for a HELOC or cash-out refinance (typically 80–90%).
- 4
See your current equity, equity gain, and how much you can borrow.
Frequently asked questions
How is home equity calculated?
Home equity is simply the current market value of your home minus all outstanding mortgage balances. If your home is worth $450,000 and you owe $280,000, your equity is $170,000 (about 38%).
What is the maximum LTV for a HELOC?
Most lenders allow a combined LTV (first mortgage plus HELOC) of 80–85% of the home value. Some lenders go up to 90%, but this typically comes with higher interest rates. Credit unions often offer more flexible terms than traditional banks.
What is the difference between a HELOC and a cash-out refinance?
A HELOC is a revolving credit line that keeps your first mortgage intact. A cash-out refinance replaces your entire mortgage with a larger loan and gives you the difference in cash. A HELOC is usually better when rates are rising (your existing mortgage rate is preserved); cash-out refinancing can be better when rates are falling.
Home Equity Calculator
How to use home equity wisely
Home equity is a powerful financial resource but should be used strategically. Common good uses include home improvements that increase property value, debt consolidation at a lower interest rate, funding education, or covering major emergency expenses. Avoid using home equity for discretionary spending, vacations, or depreciating assets like cars — this converts a secured asset into consumer debt.
Building equity faster
Equity grows through two channels: paying down your mortgage principal and home value appreciation. You can accelerate equity building by making extra principal payments, avoiding cash-out refinancing, choosing a 15-year mortgage, or making improvements that increase appraised value. Even an extra $200/month payment can shave years off your mortgage and add tens of thousands to your equity position.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →