This home equity calculator shows how much of your home you own outright, your loan-to-value (LTV) ratio, and roughly how much you could borrow against it with a home equity loan or HELOC.
How home equity is calculated
Home equity = home value − all loans secured by the home
Borrowing limit ≈ home value × maximum CLTV − all existing loans
CLTV (combined loan-to-value) adds up every loan on the home. Many lenders cap it at 80% to 85% for home equity loans and HELOCs, and a few go to 90% for strong borrowers.
Worked example
A home worth $450,000 with a $250,000 mortgage has $200,000 of equity, or 44.4% of its value. At an 85% CLTV limit, a lender might let you borrow up to $450,000 × 85% − $250,000 = $132,500.
Ways to use home equity
| Option | How it works | Best for |
|---|---|---|
| Home equity loan | Lump sum, fixed rate, fixed payments | One large known cost |
| HELOC | Credit line, usually variable rate | Ongoing or uncertain costs |
| Cash-out refinance | Replace your mortgage with a bigger one | When new rates are similar or lower |
Before you borrow
- Your home secures the loan, so missed payments can lead to foreclosure.
- Lenders check credit score, income and debt-to-income ratio as well as equity.
- In the US, interest may be tax-deductible only when the money is used to buy, build or substantially improve the home.
Frequently asked questions
How can I increase my home equity?
Paying down your mortgage, making extra principal payments, improving the home and rising local prices all increase equity.
How much equity do I need for a HELOC?
Many lenders want you to keep at least 15% to 20% equity after the new loan, which is the same as an 80% to 85% CLTV limit.
How do lenders value my home?
Usually with an appraisal, sometimes with an automated valuation. Their figure may be lower than online estimates.
What is negative equity?
Owing more than your home is worth. It makes it hard to sell or refinance until prices rise or the loan is paid down.
Is it a good idea to borrow against my home?
It can be a low-cost way to fund home improvements or replace high-rate debt, but it puts your home at risk, so it suits borrowers with stable income and a clear repayment plan.
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Sources
Last reviewed: October 2026. This calculator is for education only and is not financial, tax or legal advice.