Home Equity Calculator
Equity, loan to value ratio, and tappable amount at 80% LTV from value and amount owed.
What it does
Home equity is the slice of the house owned free and clear: market value minus every loan secured against it. It grows with each principal payment and with rising prices, and shrinks with new borrowing or falling values.
The tool above takes current value with total amount owed. It returns equity dollars with the loan to value ratio and the tappable amount at the common 80% combined cap beside them.
The default $400,000 home with $250,000 owed holds $150,000.00 of equity at 62.50% LTV, leaving $70,000.00 tappable at 80%. An underwater $300,000 home owing $320,000 shows -$20,000.00 at 106.67% with nothing tappable.
The structure follows the federal home equity borrowing booklet with bureau loan to value rules matching each term. Both define equity as value minus owed and treat 80% LTV as the line where mortgage insurance and most second loans pivot.
How to use
- Enter an honest current home value from comps or appraisal.
- Enter every mortgage balance on the home combined.
- Read equity first for the owned slice.
- Read LTV to see where the loan sits against value.
- Read the 80% line for a planning figure before calling lenders.
Formula
- value
- Current market value, not purchase price.
- owed
- All loans secured by the home combined.
- 80%
- Common combined cap lenders use for equity credit.
Underwater homes show negative equity with LTV above 100 and zero tappable, which the tool reports plainly instead of rejecting. Appraisals, credit, and income decide every real offer beyond this planning math.
Worked example
Example: $400,000 home, $250,000 owed
Defaults: value 400000, owed 250000.
- Equity: 400,000 - 250,000 = $150,000.00.
- LTV: 250,000 / 400,000 x 100 = 62.50%.
- Cap: 400,000 x 0.80 = $320,000.00 combined borrowing.
- Tappable: 320,000 - 250,000 = $70,000.00 at 80% LTV.
- Tool shows $150,000.00, 62.50 %, $70,000.00 at 80% LTV.
Reference table
| Owed | Equity | Tappable at 80% |
|---|---|---|
| $100,000 | $300,000.00 (25.00%) | $220,000.00 |
| $250,000 | $150,000.00 (62.50%) | $70,000.00 |
| $320,000 | $80,000.00 (80.00%) | $0.00 |
Limits
- Planning math only; appraisals move value both ways.
- Credit, income, and debt ratios gate every real approval.
- Rates, fees, and draw rules differ by product.
- Borrowing against equity risks the home itself on default.
Common mistakes
- Using purchase price years later instead of current value.
- Forgetting second loans and HELOC balances in owed.
- Treating the full equity as borrowable past the 80% cap.
- Spending equity on depreciating buys without a plan.
- Ignoring closing costs on the new credit.
Try it yourself
Quick checks. Answers sit tucked under each question.
$300,000 value owing $320,000?
-$20,000.00 equity at 106.67% LTV, $0.00 tappable.
Owing $320,000 on $400,000?
$80,000.00 equity at exactly 80.00%: nothing left under the cap.
Why 80%?
The common line where mortgage insurance drops and most equity lenders cap combined loans.
Questions
How do I calculate home equity?
Value minus owed. $400,000 minus $250,000 is $150,000.
What is LTV?
Owed divided by value times 100. Lower means more cushion for the lender.
How much equity can I borrow?
Often up to 80% of value minus owed. Here $320,000 minus $250,000 is $70,000.
Can equity be negative?
Yes, called underwater. Owing $320,000 on $300,000 is -$20,000 at 106.67%.
Does equity equal cash?
No. It turns into cash only through sale, refinance, or equity credit, each with costs.
HELOC or home equity loan?
A line flexes with draws and often variable rates; a loan pays one lump sum on a schedule.