Determine your current home equity by subtracting what you owe from your home value. See how much you could borrow through a home equity line of credit (HELOC) based on your lender's maximum loan-to-value ratio.
Home equity is the slice of your home you actually own — the difference between what the home is worth and what you still owe against it. On a $400,000 home with a $250,000 mortgage and no other liens, your equity is $150,000. That number tends to grow over time from two directions: your mortgage balance shrinks with every monthly payment (slowly at first, faster later), and the home itself usually appreciates in market value at a 3–5% long-run pace.
Equity matters because it's the largest single component of net worth for most American households, and because it can be tapped for cash through a Home Equity Line of Credit (HELOC), a home equity loan, a cash-out refinance, or a reverse mortgage (if you're 62+). Lenders cap how much of your equity is borrowable using a Combined Loan-to-Value (CLTV) ratio — typically 80–85% of the home's value across all loans secured by the property. The math is straightforward: maximum borrowable equity equals home value times the CLTV cap, minus everything currently secured by the home.
This calculator computes your current equity and your available borrowing capacity under a chosen CLTV cap, and shows a sample monthly interest cost at the entered HELOC rate. Use it to understand your equity position before applying for a loan, and to test what a value-adjusted appraisal might mean for your borrowing power. Treat the result as a starting estimate — actual loan offers depend on credit score, income, debt-to-income, and the lender's specific overlay rules.
Home value: $500,000. Mortgage: $300,000. No other liens. 80% CLTV cap. Equity: $500,000 − $300,000 = $200,000 Maximum debt: $500,000 × 0.80 = $400,000 Available borrowing: $400,000 − $300,000 = $100,000 If you draw $80,000 at 8.5%: interest-only monthly cost ≈ $567. New CLTV: 76%. Plenty of breathing room. Good position for renovation funding or debt consolidation if the use is value-creating.
Bought 7 years ago for $300,000 with 20% down. Now worth $550,000. Mortgage balance: $215,000. Equity: $550,000 − $215,000 = $335,000 At 80% CLTV: Max debt $440,000. Available borrowing: $225,000. Substantial borrowing capacity built up entirely from market appreciation plus principal paydown. Common for owners who bought before recent runs in housing values.
Home value: $350,000. Mortgage: $310,000 (originated at higher LTV). Existing HELOC balance: $25,000. 80% CLTV cap. Equity: $350,000 − $310,000 − $25,000 = $15,000 Max debt: $350,000 × 0.80 = $280,000 Existing total debt: $310,000 + $25,000 = $335,000 Available borrowing: $0 (already over the cap by $55,000). In this situation, the homeowner cannot take additional secured borrowing. Either the home would need to appreciate, the existing mortgage would need to be paid down, or the homeowner would need an unsecured loan instead.
Use this calculator any time you're thinking about using your home equity — for a renovation, a debt consolidation, a college tuition need, a business investment, or just to understand your overall net worth position. Knowing your available borrowing capacity is the first step in deciding whether a HELOC, home equity loan, or cash-out refinance is even feasible.
It's also useful as an annual check-in. Home values move, mortgage balances drop, and the gap between the two — your equity — is one of the largest assets on the household balance sheet. Watching it grow (or, occasionally, shrink) is part of long-term wealth tracking.
Pair this calculator with the HELOC calculator (to model draw and repayment payments), the mortgage-refinance calculator (cash-out refi is often a better alternative when current mortgage rates are competitive), and the rental-property calculator if the equity tap is for an investment property purchase.
It is not a substitute for an actual loan application. Lenders evaluate credit, income, employment, debt-to-income ratio, and property condition in addition to LTV — a strong equity position alone doesn't guarantee approval. Use the calculator as the math floor; actual loan offers vary.
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Total Home Equity
$150,000
Equity Percentage
37.5%
Available HELOC
$70,000
Current LTV
62.5%