Free Equity Buildup Calculator
Calculate total equity after a given period combining initial equity, mortgage paydown, and property appreciation.
USD
USD
USD
%
years
Projected Equity
$173,710
Current Equity$80,000
Equity from Appreciation$63,710
Equity from Loan Paydown$30,000
Projected Equity vs Monthly Principal Paydown
How Equity Builds Over Time
Equity in real estate grows from two main sources: mortgage principal paydown and property appreciation.
Formula
Future Equity = Future Property Value - Future Loan Balance
Sources of Equity
1. Initial equity from your down payment 2. Paydown equity from each mortgage payment that reduces the principal 3. Appreciation equity from market value increases
Example Calculation
A $400,000 property with a $320,000 loan balance, $500/month principal paydown, 3% appreciation, held for 5 years.
- 01Current equity: $400,000 - $320,000 = $80,000
- 02Future property value: $400,000 x (1.03)^5 = $463,710
- 03Total principal paydown: $500 x 60 = $30,000
- 04Future loan balance: $320,000 - $30,000 = $290,000
- 05Projected equity: $463,710 - $290,000 = $173,710
- 06Equity from appreciation: $463,710 - $400,000 = $63,710