Home Equity Calculator

Equity is the part of a property that is genuinely yours: current market value minus everything secured against it. It grows two ways at once — through the principal in each mortgage payment, and through any change in the property value, which can move in either direction.

Loan-to-value is the same relationship expressed from the lender's side, and it is the number that governs what rates you are offered. Crossing below a threshold such as 80% or 60% frequently unlocks materially cheaper borrowing.

The formulas

Equity = current value − mortgage balance. Loan-to-value = balance ÷ value × 100. The most that can be released is (value × maximum LTV) − current balance, which is zero or negative when you are already at the limit.

Worked example

A property worth 450,000 with 260,000 outstanding has 190,000 of equity and an LTV of 57.8% — you own about 42% of it. If a lender will go to 80% LTV, the maximum loan is 360,000, so up to 100,000 could in principle be released.

Value is an estimate until someone pays it

Every figure here depends on the market value you enter, and a lender will use its own valuer rather than your estimate. Use recent completed sales of genuinely comparable properties, not current asking prices, which reflect hope rather than transactions.

Frequently asked questions