Home Equity Calculator

The calculator on this page helps you understand how much equity you currently have in your home. More important, the interactive chart below lets you experiment with how your home equity will grow as your home’s value increases and as you pay off your home mortgage. (Learn more)

Home equity refers to the amount of value that you accumulate in your home and is calculated as difference between how much your home is worth and all of your outstanding home loan balances. If, like most homebuyers, you take a mortgage to buy your home, the amount of equity that you have in your home in its early years is very close to your down payment amount. Your equity, however, grows over time as you reduce your loan balance by making mortgage payments . Your equity may increase even more significantly as your home value increases through home improvements that you make as well as general increases in your local real estate market.

You can realize the benefit of the home equity that you build in two ways. When you sell your home, you will receive the equity that you have built in the form of profit from the sale. You can also benefit from your home equity even before you sell your home by borrowing against it through a Home Equity Line of Credit (HELOC).

In a volatile housing market, your home equity may fluctuate. Because equity is tied to the value of your home, If property values in your area depreciate, you may lose much of the equity you have built in your home. In some cases, if the value of your home falls below the balance of your home loans, you are considered to have negative equity.

Principal and Interest Payment Interview

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Loan Details

Current Home Value:
$
Home Appreciation Rate:
		%
Current Loan Balance:
$
Loan Initial Interest Rate:
		%
Years Remaining on Loan:

Have questions about home equity? Fill out the Contact form on your left to have a HUD approved housing counselor contact you to help answer your questions.

THIS SUMMARY PROVIDES ESTIMATES ONLY . Before making any home or loan purchase decision, you should obtain the advice of a professional financial advisor who is aware of your individual circumstances. Please refer to the Terms Of Use for a complete description of the proper use of this information.

Understanding Your Results

Monthly Loan Payment: This is the amount you pay each month to your bank for Principal and Interest. If your interest rate does not change over the course of your loan, this value will be the same each month for the life of your loan. Notice that this value does not account for your mortgage payment which typically includes property taxes and insurance. To experiment with your total PITI, try this mortgage calculator .

Principal Payment: While holding your mouse on the orange columns in the chart, Principal is the portion of your monthly mortgage payment that goes towards paying off your loan. Depending on your interest rate, only a small portion of your monthly mortgage payment goes towards your principal each month when you first buy your home. However, as your principal payments slowly reduce your loan balance, more of your monthly payment begins to go towards principal to help pay off your loan completely.

Interest Payment: While holding your mouse on the blue columns in the chart, Interest is the portion of your monthly mortgage payment that is paid to the bank as a fee for letting you borrow money. At the beginning of your loan, when your balance is at its highest, most of your monthly payment goes towards paying interest. However, as you slowly reduce your balance through paying principal, less of your monthly payment goes towards interest and more goes towards principal.