Home Equity Calculator

Home equity is the difference between what a property is worth and what is owed on it. A 400,000 property with a 180,000 mortgage has 220,000 of equity, or 55% of the property. Equity is what backs a home-equity loan, what a downsizing sale releases before its costs, and what usually funds the deposit on a next home.

Which inputs matter most

Both inputs move the cash equity one for one: every unit added to the value raises equity by one unit, and every unit of balance owed reduces it by one. The ratio rows behave differently. Equity % and LTV depend on the balance as a share of the value, so on an equal-sized change in money terms the balance is the larger lever, by a factor equal to the value divided by the balance: at a 45% LTV, a little over twice. On that money-terms basis the value lever overtakes the balance lever only once the balance exceeds the value, which is to say in negative equity. Expressed as a percentage change to either input instead, the balance lever is larger by exactly one percent, at any loan-to-value.

What's happening under the hood

Equity is current property value minus outstanding mortgage balance, and the two ratio rows restate that one figure against the property value: Equity % is the share owned outright, LTV the share still financed, and the two always sum to 100%. The model uses the figures as entered and applies no costs of any kind.

Why this matters

For many households the equity in a property is a large share of net worth, and it moves with two figures: the property's market value and the outstanding balance. Seeing how 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. A sale carries its own costs, including agent and legal fees and any charges secured against the property, all of which reduce the cash actually released. The value entered is an estimate: a formal valuation or an actual sale can come in higher or lower, and prices move over time, so the result is a snapshot rather than a fixed amount.

Where to go next

This calculation rarely sits alone in a planning exercise. The loan to value calculator states the same subtraction as the ratio lenders quote, and the home equity growth calculator projects the same position forward as the balance amortises and the value moves.