Home Equity Calculator: Equity and HELOC Limit
How much equity do I have in my home, and how much can I borrow against it? Enter your home value, mortgage balance, any existing second loan and the combined LTV a lender allows. For the LTV of a single loan use the loan-to-value calculator.
Updated
Report a problem
Formula
equity = home value - mortgage - other loansLTV = mortgage / home valueCLTV = (mortgage + other loans) / home valuemaximum HELOC = max(0, home value x CLTV limit - mortgage - other loans)
Worked example
Home value 400,000, mortgage 250,000, no other loans, CLTV limit 85%:
- Equity: 400,000 - 250,000 = 150,000 (37.5%)
- LTV and CLTV: 250,000 / 400,000 = 62.5%
- Ceiling: 400,000 x 0.85 = 340,000, so the maximum HELOC is 340,000 - 250,000 = 90,000
If the home is worth less than the debts, equity is negative and no HELOC is available.
When to use it
Use this page when you are thinking of a home equity loan or line of credit and want to know your borrowing room. It counts every loan against the property. For only your first mortgage's LTV, or the 80% mortgage insurance line, use the loan-to-value calculator. For what you would take home after a sale, use the home sale proceeds calculator.
Second example
A 500,000 home with a 300,000 mortgage and a 30,000 existing line:
- Equity: 500,000 - 330,000 = 170,000 (34%).
- LTV 60%, CLTV 66%.
- At an 80% CLTV limit the ceiling is 400,000, so the maximum new line is 70,000.
Common mistakes
- Using an old valuation instead of a realistic current value.
- Forgetting an existing second loan.
- Spending all the equity; prices can fall and leave you underwater.
Frequently asked questions
How do I calculate home equity?
Subtract everything owed against the home from its value. A 400,000 home with a 250,000 mortgage has 150,000 of equity, or 37.5% of the value.
What is the difference between LTV and CLTV?
LTV is the mortgage divided by the value: 250,000 / 400,000 = 62.5%. CLTV adds the other loans secured on the home. With a 20,000 HELOC, CLTV is 270,000 / 400,000 = 67.5%.
How is the maximum HELOC worked out?
Multiply the home value by the CLTV limit, then subtract what is already owed. At 85% the ceiling on 400,000 is 340,000, so the room for a new line is 340,000 - 250,000 = 90,000.
Will a lender give me this amount?
Not necessarily. Lenders set their own CLTV limits and also look at income, credit and a valuation of the home. Treat the figure as an upper estimate.
How much equity do I have if my home is worth 450,000 and I owe 250,000?
Your equity is 450,000 - 250,000 = 200,000, or 44.44% of the value. At an 85% combined LTV limit the ceiling is 382,500, so the room for a new line is 132,500.
How much equity do I need to get a HELOC?
Lenders usually require that all loans together stay below a limit, often 80 to 85% of the value, but the number is theirs to set. On a 500,000 home with a 300,000 mortgage and a 30,000 existing line, an 80% limit allows 400,000 in total, leaving 70,000.
Is home equity the same as net worth in my home?
Equity is value minus what you owe against the property, before selling costs. If you sold, commission and fees would reduce the cash you receive, so use the home sale proceeds calculator for that figure.