Home Equity Calculator
Calculate your current home equity and project future equity growth with appreciation and mortgage paydown. See how your equity builds over time with a detailed timeline visualization.
Historical average: 3-4%
Required for paydown calculation
Complete Analysis
Calculate current equity, LTV, and projected future equity with appreciation and paydown.
Visual Timeline
See your equity buildup over time with an interactive timeline chart.
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All calculations happen in your browser. Your financial data stays with you.
Frequently Asked Questions
What is home equity?
Home equity is the portion of your home that you truly own. It is calculated by subtracting your mortgage balance from your home's current market value. For example, if your home is worth $400,000 and you owe $250,000 on your mortgage, you have $150,000 in equity.
How does home equity grow over time?
Home equity grows in two main ways: through home appreciation (your home increasing in value) and through mortgage paydown (reducing your loan balance with each payment). As you make monthly payments, more equity builds from the principal portion of your payment.
What is a good loan-to-value (LTV) ratio?
A loan-to-value ratio below 80% is generally considered good. This means you have at least 20% equity in your home. An LTV below 80% often qualifies you for better loan terms and eliminates the need for private mortgage insurance (PMI).
How can I use my home equity?
Home equity can be accessed through home equity loans, home equity lines of credit (HELOCs), or cash-out refinancing. Common uses include home improvements, debt consolidation, education expenses, or emergency funds. However, remember that your home serves as collateral.
What is a typical home appreciation rate?
Historical average home appreciation in the US is around 3-4% annually, though this varies significantly by location and market conditions. Some areas may see higher or lower rates, and appreciation is not guaranteed. Recent years have seen higher rates in many markets.
How do extra payments affect my equity?
Making extra principal payments directly increases your equity by reducing your mortgage balance faster. This not only builds equity quicker but also saves on interest charges over the life of the loan, as you reduce the principal that interest is calculated on.