Home equity is the share of your home you own outright. It is the difference between what your home is worth today and the total you still owe against it.
It is the single most useful number a homeowner can know, because it determines what you can borrow, what you would walk away with in a sale, and how exposed you are if prices fall.
Equity = current market value − all loan balances secured by the home. That includes your first mortgage, any second mortgage, a HELOC balance, and any liens.
If your home is worth $450,000, your mortgage balance is $195,000 and you carry a $15,000 HELOC balance, your equity is $240,000 — about 53% of the home's value.
Two forces move it. Amortization pays down principal a little more every month, and market appreciation raises the value side of the equation.
Early in a 30-year loan, most of your payment is interest, so equity builds slowly through payments and quickly through the market. Later, that reverses.
Run your own figures through the calculator. No credit check, nothing saved unless you ask.
Calculate my equityNo. Your down payment is where your equity started. Since then it has moved with your loan balance and your home's market value.
Yes. If you owe more than the home is worth — often called being underwater — your equity is negative until prices recover or you pay the balance down.
Part of The Homeowner's Guide to Home Equity.
Find out how much equity you have in your home in about a minute, using your home value and loan balances.
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