Home equity is the share of a home’s value actually owned outright — what’s left after subtracting everything still owed against it.
How it works
Current home value minus the mortgage balance and any other liens (a HELOC or second mortgage) gives equity in dollars. The same numbers, expressed as a ratio of debt to value instead, give loan-to-value (LTV) — the figure lenders use to qualify borrowers for refinancing or a home equity line.
Why LTV matters beyond home equity lending
LTV also determines whether private mortgage insurance can be dropped on a conventional loan, typically once it falls to 80% or below — the same underlying ratio calculated here, used for a different purpose.
How to use this calculator
- Enter the current estimated value of the home.
- Enter the mortgage balance and any other liens against it.
Frequently asked questions
Where should I get a home value estimate from?
An appraisal is the most reliable; automated estimates from listing sites are a rough starting point but can be meaningfully off in either direction.
What does it mean to have negative equity?
It means more is owed than the home is currently worth — sometimes called being “underwater” — which can complicate selling or refinancing until value recovers or the balance is paid down.
Does a HELOC I haven’t drawn on count against my equity?
Typically the full approved line is treated as a lien for LTV purposes by lenders, even if only part of it has actually been drawn.
