Home Equity Calculator

Home Equity is evaluated from Estimated Home Value, First Mortgage Balance and Existing HELOC Balance. The calculation reports Total Equity, Equity Percentage and Max Allowable Total Debt.

Results

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About the Home Equity Calculator

Home Equity is treated here as a quantitative relation between Estimated Home Value, First Mortgage Balance, Existing HELOC Balance and Max CLTV Limit and Total Equity, Equity Percentage, Max Allowable Total Debt and Available to Borrow.

The calculator uses a multi formula configuration. Each reported value is read as a direct evaluation of the stored rules with the declared field formats and units.

Formula basis:
Total Equity = Home Value - First Mortgage - HELOC Balance
Equity% = Total Equity / Home Value x 100
Max Allowable Total Debt = Home Value x CLTV Limit
Available to Borrow = Max Allowable Debt - (First Mortgage + HELOC Balance)
Default CLTV limit = 80% (most lenders). Adjust to 85 - 90% for high LTV programs.

Interpret the outputs in the order shown by the result fields. Optional inputs affect only the outputs that depend on those variables.

Formula & How It Works

The calculation applies the following relations exactly as recorded in the metadata:

Total Equity = Home Value - First Mortgage - HELOC Balance
Equity% = Total Equity / Home Value x 100
Max Allowable Total Debt = Home Value x CLTV Limit
Available to Borrow = Max Allowable Debt - (First Mortgage + HELOC Balance)
Default CLTV limit = 80% (most lenders). Adjust to 85 - 90% for high LTV programs.

Each output field is produced by substituting the supplied inputs into the relevant relation and then applying the declared rounding or text format.

Worked Examples

Example 1: Strong Equity Position

Inputs

home_value: 580000 mortgage_balance: 285000 heloc_balance: 0 cltv_limit: 80
Total Equity: $295,000. Equity Percentage: 50.9%. Max Allowable Total Debt: $464,000. Available to Borrow: $179,000

With Estimated Home Value = 580,000, First Mortgage Balance = 285,000, Existing HELOC Balance = 0 and Max CLTV Limit = 80 as the stated inputs, the result is Total Equity = $295,000, Equity Percentage = 50.9% and Max Allowable Total Debt = $464,000. Each value corresponds to the declared output fields.

Example 2: Just Above 20% Equity — HELOC Eligibility

Inputs

home_value: 420000 mortgage_balance: 325000 heloc_balance: 0 cltv_limit: 80
Total Equity: $95,000. Equity Percentage: 22.6%. Max Allowable Total Debt: $336,000. Available to Borrow: $11,000

With Estimated Home Value = 420,000, First Mortgage Balance = 325,000, Existing HELOC Balance = 0 and Max CLTV Limit = 80 as the stated inputs, the result is Total Equity = $95,000, Equity Percentage = 22.6% and Max Allowable Total Debt = $336,000. Each value corresponds to the declared output fields.

Example 3: Existing HELOC Balance

Inputs

home_value: 650000 mortgage_balance: 380000 heloc_balance: 45000 cltv_limit: 80
Total Equity: $225,000. Equity Percentage: 34.6%. Max Allowable Total Debt: $520,000. Available to Borrow: $95,000

With Estimated Home Value = 650,000, First Mortgage Balance = 380,000, Existing HELOC Balance = 45,000 and Max CLTV Limit = 80 as the stated inputs, the result is Total Equity = $225,000, Equity Percentage = 34.6% and Max Allowable Total Debt = $520,000. Each value corresponds to the declared output fields.

Example 4: Underwater — Negative Equity

Inputs

home_value: 310000 mortgage_balance: 340000 heloc_balance: 0 cltv_limit: 80
Total Equity: -$30,000. Equity Percentage: -9.7%. Max Allowable Total Debt: $248,000. Available to Borrow: $0

With Estimated Home Value = 310,000, First Mortgage Balance = 340,000, Existing HELOC Balance = 0 and Max CLTV Limit = 80 as the stated inputs, the result is Total Equity = -$30,000, Equity Percentage = -9.7% and Max Allowable Total Debt = $248,000. Each value corresponds to the declared output fields.

Common Use Cases

  • Calculate how much equity you have in your home
  • Find out how much you can borrow with a HELOC
  • Track equity growth as you pay down your mortgage