Free Home Equity Calculator
Calculate your current home equity based on the estimated market value and remaining mortgage balance, and see how equity grows over time with appreciation and principal payments.
Current Home Equity
$170,000
Current Home Equity vs Monthly Principal Payment
Understanding Home Equity
Home equity is the difference between your home's current market value and the amount you still owe on the mortgage. It represents your ownership stake in the property.
Formula
Home Equity = Current Market Value - Mortgage Balance
How Equity Grows
Equity increases in two ways: 1. Principal payments: Each mortgage payment reduces your loan balance, increasing equity 2. Appreciation: As the home value rises, your equity grows automatically
Why Equity Matters
Example Calculation
A home worth $450,000 with a $280,000 mortgage balance, $650 monthly principal payments, 3% annual appreciation, projected 5 years ahead.
- 01Current equity: $450,000 - $280,000 = $170,000
- 02Equity percentage: $170,000 / $450,000 = 37.8%
- 03LTV ratio: $280,000 / $450,000 = 62.2%
- 04Future home value: $450,000 x 1.03^5 = $521,468
- 05Future balance: $280,000 - ($650 x 60) = $241,000
- 06Projected equity: $521,468 - $241,000 = $280,468
- 07Equity growth: $280,468 - $170,000 = $110,468