🏦 Home Equity Calculator
Enter your home's current market value and remaining mortgage balance to find your equity and loan-to-value ratio.
Equity is a subtraction, LTV is the ratio lenders read
Equity is what is left of the house after the mortgage. Loan-to-value flips it round and states the debt as a share of the value:
equity = current value - mortgage balance
LTV % = mortgage balance / current value × 100A $400,000 home with $250,000 still owed gives $150,000 of equity and an LTV of 62.5%. The two always add to 100%: 62.5% owed, 37.5% owned.
Owning equity and being able to borrow it are different
- Lenders cap combined LTV at 80-85%. At 85% of $400,000 the total debt allowed is $340,000, so against $250,000 owed you could draw about $90,000 - not the full $150,000.
- Selling costs come off the top. Agent commission and closing fees of roughly 6-8% take $24,000 to $32,000 out of that $150,000.
- PMI uses the original price. You can ask to cancel at 80% LTV, but automatic termination at 78% is measured against the purchase price, not today's value.
Frequently asked questions
How much equity do I need to get a HELOC?
Most lenders want 15-20% left untouched, so you need an LTV below 85% after the draw. On a $400,000 home with $250,000 owed that is roughly $90,000 available.
Does a bigger mortgage payment build equity faster?
Yes, and disproportionately early on. Extra payments go straight to principal, skipping the interest that dominates the first ten years of a 30-year loan.
What LTV do I need to drop PMI?
80%. Request cancellation once the balance falls to 80% of the original purchase price; the servicer must drop it automatically at 78% if payments are current.