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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.

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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
  • Check the units and required inputs before comparing results.
  • Keep the assumptions with a copied result so you can reproduce the calculation later.
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Reference & details

How it works

Home Equity Formula

Equity is the portion of your home you own outright — current market value minus remaining mortgage balance.

Equity = Home Value − Remaining Loan Balance

Property Appreciation

Future home value applies compound annual appreciation to the purchase price or current value.

Future Value = Price × (1 + annual rate)^years

Mortgage 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

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.