Home Equity Calculator
Calculate home equity over time from mortgage paydown and property appreciation. Project equity buildup from down payment, loan balance, and home value growth.
Specialist tool for Real Estate Analysis1 documented formula4 recommended next stepsPrivate in your browser
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Inputs that matter
Purchase / Current Home Price, Down Payment, Mortgage Rate, Loan Term, and 2 more
Output to expect
Home Equity Calculator
How it works
1 documented formula across 1 calculation mode
- Keep 2 bounded inputs within the limits shown beside the fields.
- Confirm that every value uses the unit and time basis shown before comparing scenarios.
- Change one input at a time to see which assumption materially changes the result.
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Reference & details
How it works
Updated July 2026
How it works
Updated July 2026Home Equity Formula
Equity is the portion of your home you own outright — current market value minus remaining mortgage balance.
Equity = Home Value − Remaining Loan BalanceProperty Appreciation
Future home value applies compound annual appreciation to the purchase price or current value.
Future Value = Price × (1 + annual rate)^yearsMortgage Amortization
Each monthly payment reduces principal according to standard amortization.
M = P[r(1+r)^n]/[(1+r)^n−1]Updated: July 2026
Example Scenarios
Typical homeowner tracking equity after five years of payments and moderate appreciation.
Home price: $400,000Down payment: $80,000Rate: 6.5%Years: 5Appreciation: 3%/yr
→ Equity ~$180K+ (down payment + principal paid + appreciation)
See how slower initial equity buildup affects LTV with a small down payment.
Down payment: 5%Years: 2
→ Equity grows mainly from appreciation and modest principal paydown early on
Estimate equity before applying for a HELOC or cash-out refinance.
Years: 10Appreciation: 4%/yr
→ Projected home value and LTV for lending decisions
Common Mistakes to Avoid
Common Mistakes to Avoid
Equating assessed value with market value
Property tax assessments and automated estimates differ from appraised market value used by lenders.
Ignoring transaction costs when accessing equity
Selling or cash-out refinancing involves closing costs (2–5% of home value).
FAQ
Home equity = current market value minus remaining mortgage balance.
Equity grows from principal paydown and property appreciation. In early years, appreciation often contributes more than principal on a 30-year mortgage.
LTV = loan balance ÷ home value × 100. LTV below 80% typically avoids PMI.
Yes — historically US home prices average ~3–4% annually nationally, but local markets differ widely.
Yes, through a home equity loan, HELOC, or cash-out refinance once you have sufficient equity and LTV.
About Home Equity Calculator
See how much equity you build as you pay down your mortgage and your home appreciates. Enter purchase price, down payment, loan terms, and expected appreciation to project equity today and over time.