Calculate your home equity, loan-to-value ratio, and how much you can borrow through a HELOC or cash-out refinance. See your equity grow over time. Updated .
See how your equity grows over time from both mortgage paydown and home appreciation. Based on your current inputs.
Compare three ways to access your home equity. Amounts are based on your current home value and mortgage balance.
Home equity is the portion of your home's value that you actually own outright, current value minus remaining mortgage balance. For most American homeowners, it's the single largest component of net worth. A homeowner with a $400,000 home and a $240,000 mortgage has $160,000 in equity, 40% of the home's value. It grows two ways: as you pay down principal each month, and as the home appreciates. The loan-to-value (LTV) ratio is the key metric lenders use. LTV = mortgage balance ÷ home value. At 60% LTV ($240K ÷ $400K), you're in a strong position. Most lenders cap borrowing at 80-85% Combined LTV for home equity products, meaning your first mortgage plus any new borrowing can't exceed 85% of the home's value. At $400,000, that's $340,000 maximum total debt. With $240,000 owed, you could potentially access up to $100,000. The most important caveat: home equity is not liquid. Accessing it takes weeks, costs thousands in fees, and puts your home at risk. It's most powerful when used for investments that increase your wealth, home improvements, consolidating high-interest debt, or funding education. Using it for vacations or consumer purchases puts your housing security at risk for depreciating assets.
Home equity is the portion of your home's value that you actually own, the difference between what your home is worth and what you still owe on your mortgage. It's one of the largest components of net worth for most American homeowners and can be a powerful financial tool when accessed responsibly.
Home Equity = Current Home Value − Remaining Mortgage Balance
If your home is worth $400,000 and you owe $240,000 on your mortgage, you have $160,000 in equity, or 40% of the home's value. Equity grows two ways: as you pay down your mortgage principal each month, and as your home appreciates in value over time.
LTV is the inverse of equity, it's the percentage of your home's value that you owe. LTV = Mortgage Balance ÷ Home Value × 100. A $240,000 balance on a $400,000 home = 60% LTV. Lenders use LTV to determine risk. Most require LTV below 80% (at least 20% equity) to avoid PMI on purchase loans. For home equity products, lenders typically allow up to 85% Combined LTV (CLTV).
| Product | How it Works | Best For | Rate Type | Max CLTV |
|---|---|---|---|---|
| HELOC | Revolving credit line, draw as needed | Ongoing expenses, renovation | Variable | 85% |
| Home Equity Loan | Lump sum, fixed payments | One-time large expense | Fixed | 85% |
| Cash-Out Refinance | New mortgage for more than owed | Lower rate + access equity | Fixed/ARM | 80% |
Home equity is most effectively used for investments that increase your wealth or reduce higher-cost debt. Best uses: home improvements that increase value (kitchens, bathrooms, additions), consolidating high-interest credit card debt, funding education, or emergency expenses with no other options. Risky uses: vacations, vehicles, consumer goods, or speculative investments. Using your home to fund consumption puts your housing security at risk.
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