Home Equity Calculator
Enter your home's current market value, remaining mortgage balance, and your lender's maximum loan-to-value ratio to calculate your available equity and the maximum you could typically borrow against it.
How the Home Equity formula works
Equity and maximum borrowable amount:
Available equity = Home value − Mortgage balance Max loan amount = (Home value × Max LTV%) − Mortgage balance
Step-by-step calculation
- Subtract your remaining mortgage balance from your home's current market value to find your equity.
- Multiply your home's value by your lender's maximum loan-to-value ratio (commonly 80-85%).
- Subtract your mortgage balance from that figure to find the maximum you could typically borrow.
Worked example
A home worth $400,000 with a $220,000 mortgage balance, and an 80% max LTV: Equity = 400,000 − 220,000 = $180,000. Max loan amount = (400,000 × 0.80) − 220,000 = 320,000 − 220,000 = $100,000.
Frequently asked questions
Why is the max loan amount lower than my total equity?
Lenders typically cap total borrowing (mortgage plus home equity loan or HELOC combined) at a percentage of your home's value — commonly 80-85% — rather than lending against 100% of your equity, to maintain a safety margin.
What's the difference between a home equity loan and a HELOC?
A home equity loan provides a lump sum with fixed payments, while a HELOC (home equity line of credit) works more like a credit card with a revolving credit limit you can draw from as needed — both are typically limited by the same loan-to-value calculation.