Your equity is your home value minus your mortgage. Here is how to calculate it and see how much a lender might allow you to borrow.
Updated November 2026
What home equity is
Home equity is the part of your home you own outright: its current market value minus what you still owe. It grows as you pay down the mortgage and as the home’s value rises, and it falls if values drop. Use the home equity calculator to see yours.
The formulas
Worked example
A home is worth $400,000 and the mortgage balance is $250,000. Equity is $150,000, which is 37.5 percent of the value. The loan-to-value ratio is 250,000 / 400,000 = 62.5 percent. If a lender allows total borrowing up to 80 percent of value, the maximum combined loans are $320,000. You owe $250,000, so you could borrow up to $70,000 more. In Excel: =B1*0.8-B2.
Equity is not cash in hand
If you sold, agent fees, closing costs and taxes would come out of the sale. Borrowing against the home also puts it at risk if you cannot repay. See how those loans are structured in the HELOC calculator, and how the CFPB describes them in its explainer on a home equity line of credit.
How to build equity faster
- Make extra principal payments. See the effect in the mortgage payoff calculator.
- Pay biweekly instead of monthly, if your servicer applies it correctly.
- Improve the home in ways that hold value, but do not assume repairs pay back in full.
Getting an accurate value
Online estimates are rough. A recent appraisal or comparable sales in your area give a better number. Lenders use their own appraisal and will set their own loan-to-value limit, credit and income requirements.
These are illustrations to help you plan, not financial advice.
Frequently asked questions
How do I calculate home equity?
Subtract the mortgage balance from the market value. $400,000 – $250,000 = $150,000.
What is LTV?
Loan-to-value, the mortgage balance divided by the home value.
How much can I borrow against my home?
Many lenders cap combined loans at a percentage of value, often around 80 percent, but limits vary.
Can I take all my equity out?
Not usually. Lenders require you to keep some equity.