Home Equity Calculator

USD
USD
USD
%

How to Calculate Home Equity

To calculate your home equity, use the following steps:

  1. Current Market Value of Home: Estimate the current market value of your home.
  2. Outstanding Mortgage Balance: Determine the remaining balance on your mortgage.
  3. Home Equity Formula: Subtract the outstanding mortgage balance from the current market value of your home.
\text{Home Equity} = \text{Market Value of Home} - \text{Outstanding Mortgage Balance}

The Loan-to-Value (LTV) Ratio formula is:

\text{LTV Ratio (\%)} = \left( \frac{\text{Outstanding Mortgage Balance}}{\text{Market Value of Home}} \right) \times 100

Example:

You own a home with a current market value of $300,000. Your outstanding mortgage balance is $150,000.

  1. Calculate home equity:\text{Home Equity} = 300,000 - 150,000 = 150,000
  2. Calculate the LTV ratio:\text{LTV Ratio} = \left( \frac{150,000}{300,000} \right) \times 100 = 50\%
  • Your home equity is $150,000.
  • Your LTV ratio is 50%, indicating you own 50% of your home’s value outright.