Home Equity Calculator
Updated: February 17 2026 • 6 min read
Written by
Bennett Leckrone
Writer / Reviewer / Expert
Reviewed by
Neel Patel
Reviewer
Key Takeaways
- Home equity is your home value minus your mortgage balance.
- You can use our equity calculator to get an idea of your current equity.
- You can also use it to explore future scenarios with optional appreciation.
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Home Equity Calculator
Estimate your equity today and model how it could change over time based on mortgage payoff and optional home appreciation.
Your Results
| Year | Home value | Mortgage | Equity | LTV |
|---|
| Month | Payment | Principal | Interest | Balance |
|---|
This tool estimates equity today and projects equity over time using two building blocks: home value and mortgage balance.
1) Equity
Equity = Home value − Mortgage balance
2) Home value over time (optional appreciation)
If “Include annual home appreciation” is checked, the calculator compounds home value each year:
Future home value = Today’s value × (1 + a)y
where a is the annual appreciation rate (as a decimal) and y is years in the future. If appreciation is unchecked, the tool uses a = 0.
3) Mortgage balance over time (amortization)
The mortgage projection assumes a standard fixed-rate loan on your current remaining balance with years remaining.
Monthly payment = P × r × (1 + r)n / ((1 + r)n − 1)
where P is today’s mortgage balance, r is the monthly interest rate (APR/12), and n is the number of remaining payments (years remaining × 12).
Each month, interest is calculated on the remaining balance and the rest of the payment reduces principal:
Interest = Balance × r
Principal = Payment − Interest
New balance = Balance − Principal
4) What the “Key years” table shows
For Year 0, a midpoint year, and the final year, the calculator: (a) estimates home value, (b) estimates remaining mortgage balance after y years, then (c) computes equity and loan-to-value (LTV).
LTV = Mortgage balance / Home value
Connect with an expert loan officer to see how much you qualify for
Understanding Home Equity and Why It Matters
At its core, home equity is simple:
Equity = Home value - Mortgage balance
Our calculator uses that same foundation, then adds an optional projection so you can see how equity and loan-to-value (LTV) could shift in future years based on your current loan details and, if you choose, home price appreciation.
Home equity is the difference between your home’s current market value and what you still owe on your mortgage. It is one of the clearest ways to measure the ownership stake you have built through a down payment, principal paydown, and changes in home value.
In practice, homeowners often look at equity when they are trying to plan renovations, consolidate high-interest debt, time a refinance to remove PMI, or deciding on whether to buy a new home.
How the Home Equity Calculator Works
This tool estimates equity today and projects equity over time using two building blocks: home value and mortgage balance.
Equity Today
Our calculator starts with a simple snapshot:
Equity = Home value - Mortgage balance
If your home is worth $400,000 and your mortgage balance is $240,000, your estimated equity is $160,000.
Home Value Over Time
If you check “Include annual home appreciation,” the calculator compounds your home value each year.
Future home value = Today’s value × (1 + a)^y
Here, “a” is the annual appreciation rate as a decimal, and “y” is the number of years in the future. Keep in mind that this only shows averages and projections, and in real life appreciation isn’t static and can vary even within local markets.
If appreciation is unchecked, the calculator keeps home values flat in the projection and only the mortgage balance changes.
Mortgage Balance Over Time
The mortgage projection assumes a standard fixed-rate loan on your current remaining balance with your years remaining.
Monthly payment = P × r × (1 + r)^n / ((1 + r)^n − 1)
- P is today’s mortgage balance
- r is the monthly interest rate (APR ÷ 12)
- n is the number of remaining payments (years remaining × 12)
Each month, interest is calculated on the remaining balance and the rest of the payment reduces principal. This is the standard amortization approach used in fixed-rate mortgage schedules. It helps you see how principal paydown can build equity over time even if home values stay the same.
What the Key Years Table Shows
The “Key years” table is designed for quick, high-signal checkpoints rather than a long year-by-year display.
For Year 0, a midpoint year, and the final year, the calculator estimates home value, estimates remaining mortgage balance after a certain number of years, and computes equity and loan-to-value (LTV).
LTV matters because it is a common threshold metric for mortgage pricing, PMI rules on conventional loans, and many home equity lending guidelines. A lower LTV generally means more equity relative to the home’s value.
How to Interpret Your Results
This calculator only provides an educational estimate, and you’ll need to consult with a professional loan officer to get an accurate picture of your home equity.
That said, here are some key benchmarks you can weigh your results against.
If you want to remove PMI
Many conventional loans use LTV as a key factor for PMI removal timing. You can request PMI cancellation at 80% LTV on a conventional conforming loan, and it falls off automatically at 78%.
If you want a HELOC or home equity loan
Equity products often rely on combined loan-to-value (CLTV). That is your first mortgage plus any other home equity liens compared to your home’s value. Even if your estimated equity looks high, your borrowing capacity can still depend on CLTV caps and underwriting.
Our calculator doesn’t include CLTV. Use the calculator to ground your expectations, then treat the result as a starting point for product and pricing discussions.
If you are considering a cash-out refinance
A cash-out refinance replaces your existing mortgage with a larger one, then you take the difference in cash.
Your projected equity path can help you evaluate tradeoffs like how much equity you want to keep as a buffer, whether changing your mortgage rate or term helps your total monthly cost, and whether a second-lien option is a better fit than resetting your first mortgage
Limits and Important Notes
Results are estimates. This calculator excludes taxes, insurance, PMI, HOA, maintenance, refinance events, HELOCs, and changing interest or appreciation rates.
If your home value estimate is off, your equity and LTV will be off. And if your mortgage is not a standard fixed-rate structure, the projected balance may not match your actual future balance
This tool can be used for scenario testing, not as a final underwriting determination.
Frequently Asked Questions
How do you calculate home equity?
Home equity is your home’s current value minus what you still owe on your mortgage.
Equity = Home value − Mortgage balance
What does the calculator project over time?
It projects home value and mortgage balance over time, then calculates future equity and LTV at key checkpoints.
What is LTV and why does it matter?
LTV is your mortgage balance divided by your home value. It is commonly used to evaluate mortgage risk, pricing, and mortgage insurance requirements.
LTV = Mortgage balance ÷ Home value
How does appreciation change the results?
If you include appreciation, the calculator compounds your home value each year using your chosen annual rate. If you leave it off, home value stays flat and only the mortgage balance changes.
What costs and events are not included?
The tool excludes taxes, insurance, PMI, HOA, maintenance, refinance events, HELOCs, and changing interest or appreciation rates. It is meant for estimates and planning scenarios.
Can I use this to estimate how much I can borrow?
You can use it to estimate equity and see how LTV changes, which can help you plan. Final borrowing capacity depends on lender rules, combined loan-to-value, credit, income, and a confirmed home valuation.
If you want, I can also adapt the “Comparing options” section from your original draft into a tighter Google Docs–friendly block that is specifically framed around what the calculator output suggests for HELOC vs home equity loan vs cash-out refinance.