Equity Home Calculator

Your home may be worth far more than you owe on it, but that does not mean you can borrow all of the difference. This calculator works out your real equity, your loan-to-value and combined loan-to-value ratios, and the amount a lender would actually let you borrow at your chosen CLTV cap, including what happens when a second lien already sits on the home.

Quick Answer

How to use this calculator

Enter your home’s current market value, your first mortgage balance, and any second lien or HELOC balance. Set the lender’s maximum CLTV: 80% is the common cap, but enter your lender’s actual number, since some lenders allow 85% or 90% with stricter credit and income requirements. Click Calculate equity to see your equity, your LTV and CLTV, the maximum total borrowing, the amount available to borrow, and the equity that stays in the home as a cushion.

Read the verdict line with the numbers, not instead of them. It tells you plainly which of three situations you are in: negative equity with nothing to borrow against, equity that exists but is already capped out by the CLTV limit, or room to borrow with a cushion left behind. The two sections further down price that available amount as an equity loan and work out a cash-out refinance break-even by hand.

The formulas behind the results

Equity is the simplest figure on the page: current market value minus all debt secured by the home, first mortgage plus any second liens or HELOC balances. LTV divides only the first mortgage by the value; CLTV divides all home-secured debt by the value. The CFPB explanation of loan-to-value ratios makes the same distinction: LTV compares the amount financed with the appraised value, and lenders use it to decide whether to lend and whether mortgage insurance applies.

Available borrowing is where most people get surprised. Maximum total borrowing equals value multiplied by the lender’s max CLTV, and available borrowing equals that cap minus the debt you already carry. If the result is negative, the calculator floors it at zero rather than showing a negative borrowing amount. Equity kept as cushion equals value minus maximum total borrowing: at an 80% cap, 20% of the value always stays in the home, which is the buffer that protects the lender if prices fall.

Worked example, checked against this exact tool

A $410,000 home with a $220,000 first mortgage and no second lien, at an 80% max CLTV. Equity equals $410,000 minus $220,000, which is $190,000.00 (46.3% of value). LTV equals $220,000 divided by $410,000, which is 53.7%; CLTV is the same with no second lien. Max total borrowing equals $410,000 multiplied by 0.80, which is $328,000.00. Available equals $328,000 minus $220,000, which is $108,000.00. Equity kept as cushion equals $410,000 minus $328,000, which is $82,000.00. Enter the same numbers above and you will get exactly these figures.

Now add a $50,000 second lien to the same home and run it again. Equity falls to $140,000.00, LTV stays 53.7% because the first mortgage did not change, but CLTV rises to 65.9%, and available borrowing falls to $58,000.00. That $50,000 drop is the whole point of the second lien input: a calculator that ignores it overstates your borrowing room by exactly the lien amount.

What the CLTV cap does to your borrowing

The cap matters more than most borrowers expect, because every point of cap moves real money. The table below holds the worked example fixed, a $410,000 home with a $220,000 mortgage, and varies only the lender cap. Every figure comes from the calculator above.

Lender max CLTV	Max total borrowing	Available to borrow	Equity kept as cushion
80%	$328,000.00	$108,000.00	$82,000.00
85%	$348,500.00	$128,500.00	$61,500.00
90%	$369,000.00	$149,000.00	$41,000.00

A lender offering 90% instead of 80% is not giving you $41,000 of free money; it is letting you keep a thinner cushion, $41,000 instead of $82,000, against a price fall. That trade can be worth it for a planned renovation with a clear payoff, and reckless for discretionary spending. Ask what rate and terms come with the higher cap before treating the bigger number as the better offer.

What would the equity loan cost?

Take the “Available to borrow” figure from the calculator above and price it as a fixed-rate home equity loan with the standard amortization formula: monthly payment equals P multiplied by r(1+r) to the power of n, divided by (1+r) to the power of n minus 1, where r is the monthly rate and n is the number of payments. The $108,000 example below costs $1,032.10 a month at 8% over 15 years, with $77,778.77 of total interest and a first year of $8,499.58 interest and $3,885.67 principal. Variable-rate HELOC draws will differ. For a month-by-month payment plan on a HELOC draw, see our monthly HELOC payment calculator, and for the payment on the first mortgage itself, the mortgage payment calculator.

The first-year split matters because it shows how slowly the balance falls at first: of the $12,385.25 paid in year one, more than two thirds is interest. Anyone borrowing for a short-term need should weigh that against a HELOC, where interest-only payments during the draw period keep monthly costs lower but leave the principal untouched.

Cash-out refinance break-even

Refinancing costs money to save money: divide the closing costs by the monthly savings to get the break-even in months. $5,000 of closing costs saving $200 a month breaks even in $5,000 divided by $200, which is 25 months (2 years 1 month). Sell or refinance again before then and the refinance cost you money; every month past break-even is pure savings. The cost to refinance mortgage calculator prices the closing-cost side in detail, and the cash-out refinance calculator models the new loan itself.

Break-even is only half the test. A cash-out refinance also replaces your existing first mortgage rate with a new one, so it only makes sense when the new rate is competitive or the cash need justifies giving up a low existing rate. If your current rate is well below today’s rates, a home equity loan or HELOC usually wins, because it leaves the cheap first mortgage intact. The HELOC strategy calculator helps compare that route.

Home equity loan vs HELOC vs cash-out refinance

Three products tap the same equity in different shapes. The CFPB comparison of home equity loans and HELOCs draws the core line: a home equity loan pays one lump sum, while a HELOC is a revolving line you draw on repeatedly up to a maximum, usually at a variable rate.

What competing calculators miss

Bank tools compute the borrowable amount but rarely explain why you cannot touch your full equity, and almost none show what happens when a second lien already exists. The strongest rival we found bolts a payment estimator onto the page; this page explains the same math in plain prose with worked examples: the first-year interest and principal split and the cash-out refinance break-even that answer the question borrowers actually ask next, which is how long until the refinance pays for itself. It also keeps the CLTV cap as an input you control, instead of hard-coding 80%, so you can model a lender that offers 85% or 90% and see the thinner cushion that comes with it.

Frequently asked questions

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