Home Equity Calculator
Instantly find out how much equity you hold in your home and what your loan-to-value ratio is. Use this when applying for a home equity loan, HELOC, or evaluating whether you can drop private mortgage insurance.
About this calculator
Home equity is the portion of your property's value that you own outright, free from any mortgage claim. It is calculated with a simple formula: Equity = currentValue − remainingBalance. For example, if your home is worth $500,000 and you owe $320,000, your equity is $180,000. A closely related metric is the loan-to-value (LTV) ratio: LTV (%) = (remainingBalance / currentValue) × 100. Lenders use LTV to assess risk; most require an LTV below 80% before approving a home equity loan or HELOC. When your LTV drops to 80% or below you can typically request cancellation of private mortgage insurance (PMI), saving hundreds of dollars per year. Equity grows as you pay down principal and as your home appreciates in value.
How to use
Your home was recently appraised at $520,000. Your most recent mortgage statement shows a remaining balance of $310,000. Step 1 — Equity: $520,000 − $310,000 = $210,000. Step 2 — LTV ratio: ($310,000 / $520,000) × 100 = 59.6%. Because your LTV is well below 80%, you are eligible to cancel PMI and may qualify for a HELOC of up to 85% combined LTV, potentially borrowing up to ($520,000 × 0.85) − $310,000 = $132,000. Enter $520,000 and $310,000 into the calculator to see these figures instantly.
Frequently asked questions
How does home equity increase over time as I pay my mortgage?
Every mortgage payment has two components: interest and principal. Only the principal portion reduces your loan balance and therefore directly increases your equity. In the early years of a 30-year mortgage, most of your payment goes toward interest, so equity builds slowly at first. As you progress through the amortization schedule, an increasing share goes to principal, accelerating equity growth. Home price appreciation also boosts equity independently of your payments.
What loan-to-value ratio do I need to get a home equity loan or HELOC?
Most lenders require a combined LTV (your primary mortgage plus the new equity loan) of no more than 80–85% of the home's appraised value. Some lenders allow up to 90% combined LTV, but they typically charge higher rates and fees. The lower your LTV, the better the interest rate you'll be offered. You'll also need a credit score of at least 620–680 and sufficient income to support the added debt payment.
When can I stop paying private mortgage insurance based on my home equity?
Under the Homeowners Protection Act (US), you have the right to request PMI cancellation when your LTV reaches 80% based on original value and your payment history is in good standing. PMI must be automatically terminated when your LTV reaches 78% based on the original amortization schedule. If your home has appreciated significantly, you can request an early cancellation by ordering a new appraisal to demonstrate a current LTV below 80%. Eliminating PMI typically saves $50–$250 per month.