Home Equity Calculator
See how much equity you have, how much a lender would let you borrow against it at 80-90% combined loan-to-value, and the payment if you drew it all.
How much of the home's value all loans together may reach.
This debt is secured by your house — the honest framing for "tapping equity" is that missing payments risks foreclosure. Consolidation onto a HELOC only works if the spending that built the card balances actually stops.
Equity you have vs equity you can touch
Homeowners hear their equity number and mentally spend all of it. Lenders have other plans — every loan against the house must fit under a combined loan-to-value ceiling, typically 80%, and the gap between raw equity and borrowable equity routinely surprises people by six figures’ worth of difference on paper.
This calculator shows both numbers and the payment a full draw would carry, because a credit line without a payment attached is how renovations become regrets.
What the buffer is for
The 20% the lender won’t touch is not stinginess — it is the margin that keeps a normal price dip from putting the loan underwater, and it protects you as much as them. Homeowners who borrowed to the ceiling in 2006 spent the next several years unable to sell or refinance. Treat the 80% line as a hard boundary, not a negotiating position.
Two practical notes on the inputs — use a defensible current value (recent neighborhood sales, not wishful thinking; the lender’s appraisal will not be sentimental), and remember HELOC rates float with prime, so today’s payment figure is a floor, not a promise.
Good uses and the honest test
Equity borrowing shines for value-adding renovations and genuinely cheaper debt consolidation, and it goes wrong funding lifestyle. The honest test for consolidation — run your card balances through the payoff calculator first; if the plan without the HELOC is “never,” the HELOC is not a plan either, it is the same spending with your house as collateral. And whatever the purpose, the new payment lands in your debt-to-income ratio, where the next lender will find it.
How this is calculated
Equity = home value − mortgage balance Borrowing power = (value × CLTV limit) − mortgage balance CLTV limit = the ceiling all loans together may reach, usually 80–85%
Frequently asked questions
- How much equity can I borrow against?
- Most lenders cap all loans on the home at 80 to 85 percent of its value, called combined loan-to-value. On a $450,000 home with $280,000 owed, an 80% cap allows about $80,000 of new borrowing — noticeably less than the $170,000 of raw equity, because the buffer is the lender's protection and yours.
- HELOC or home equity loan — what is the difference?
- A home equity loan is a lump sum at a fixed rate with a fixed payment, suited to one-time known costs. A HELOC is a credit line you draw as needed at a variable rate, suited to phased projects. The borrowing ceiling is the same; the risk shape differs.
- Is using home equity to pay off credit cards smart?
- It converts expensive unsecured debt into cheap secured debt — the rate math is genuinely attractive, and the risk math deserves equal billing, because the card debt could not take your house and the HELOC can. It works only when the spending that built the balances actually stops.
- Why is my borrowing power zero?
- Your mortgage balance already sits at or above the lender's CLTV ceiling — common in the first years of a loan or after prices dip. Equity builds from both directions, principal payments and appreciation, so the number grows on its own schedule.