Equity Calculator
Calculate home equity
Frequently Asked Questions
How do I calculate my home equity?
Home equity = Current Market Value - Outstanding Mortgage Balance. For example, if your home is worth $400,000 and you owe $250,000, your equity is $150,000 or 37.5% of the property value.
What is a good equity percentage for refinancing?
Most lenders require at least 20% equity to refinance without private mortgage insurance (PMI). Having 25-30% equity typically qualifies you for the best interest rates and loan terms.
How does equity build over time?
Equity grows through two mechanisms: principal payments on your mortgage reduce the balance, and property appreciation increases market value. In the early years of a mortgage, most of your payment goes to interest, so equity builds slowly at first.
What is a home equity line of credit (HELOC)?
A HELOC lets you borrow against your home equity as a revolving credit line. You can typically borrow up to 80-85% of your equity. Interest rates are usually variable and lower than credit cards or personal loans.
How does property appreciation affect equity?
If your home appreciates 3% annually, a $400,000 home gains $12,000 in equity per year from appreciation alone. Combined with mortgage payments, total equity growth can be $20,000-$30,000 annually in the early years.