Home Equity Calculator Formula

Understand the math behind the home equity calculator. Each variable explained with a worked example.

Use the Home Equity Calculator

Formulas Used

Home Equity

equity = home_value - mortgage_balance

Equity Percentage

equity_percent = home_value > 0 ? (home_value - mortgage_balance) / home_value * 100 : 0

Loan-to-Value (LTV)

ltv = home_value > 0 ? mortgage_balance / home_value * 100 : 0

Variables

VariableDescriptionDefault
home_valueCurrent Home Value(USD)400000
mortgage_balanceRemaining Mortgage Balance(USD)250000

How It Works

Home Equity Formula

Equity = Home Value - Mortgage Balance

LTV = Mortgage Balance / Home Value × 100%

You can typically borrow against equity via a HELOC or home equity loan when LTV is below 80%.

Worked Example

Home worth $400,000 with $250,000 mortgage remaining.

home_value = 400000mortgage_balance = 250000
  1. 01Equity = $400,000 - $250,000 = $150,000
  2. 02Equity % = $150,000 / $400,000 = 37.5%
  3. 03LTV = $250,000 / $400,000 = 62.5%

Ready to run the numbers?

Open Home Equity Calculator