Home Equity Calculator

Home equity is the difference between what your property is worth and what you owe on it. A 400,000 property with a 180,000 mortgage has 220,000 of equity — 55% of the property. Equity is the source of funds for home-equity loans, downsizing, and the deposit on a next home.

Quick example

With property value of 400,000 and mortgage balance of 180,000, the result is 220,000.00. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Property Value and Mortgage Balance. Both move the cash equity pound-for-pound: every unit added to the value raises equity by one unit, and every unit of balance owed reduces it by one. Neither input dominates. The equity figure responds equally to both.

What's happening under the hood

Equity = current property value minus outstanding mortgage balance. Ignores selling costs. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Why this matters

Home equity is often the largest share of a household's net worth, yet it moves with two figures: the property's market value and the outstanding balance. Seeing how the equity responds to a change in either (a market move, or a few more years of paydown) makes the position concrete rather than abstract.

What this doesn't capture

The figure shown is the raw equity position. Selling would bring its own costs (agent fees, legal fees, and any charges secured against the property) that reduce the cash actually released. The value entered is also an estimate; a formal valuation or an actual sale can come in higher or lower, and property prices shift over time, so this is a snapshot rather than a fixed amount.

Where to go next

This calculation rarely sits alone in a planning exercise. If you're running these numbers, you'll probably also want the loan to value calculator, the equity buildup calculator, and the negative equity calculator — each one answers a different question in the same territory. Treating them as a set rather than in isolation usually produces a more honest picture.