Calculations are estimates for planning purposes only and aren’t financial advice.
How to Use This Home Equity Calculator (Explained Like a Normal Human)
1. Home Value
Put what your house is actually worth today.
Not what you paid, not what your agent hyped, not your dream number.
Use a realistic estimate:
- Zillow/Redfin estimate
- A recent appraisal
- Recent home sales on your street
Just get close, it doesn’t have to be perfect.
2. First Mortgage Balance
This is how much you still owe on your primary mortgage.
You’ll find it on your mortgage statement in the field labeled Principal Balance.
3. Second Mortgage / HELOC Balance (If You Have One)
If you don’t have a second loan or HELOC, just leave it 0.
HELOC = Home Equity Line of Credit
Think of it as a credit card tied to your house, you can borrow, repay, borrow again, etc.
3. Set Your Max CLTV (%)
This is the big one, and most people never hear this term explained clearly.
CLTV = Combined Loan-to-Value Ratio
It measures how much total debt you’d have against your home after borrowing.
Most lenders cap you at around 80% CLTV.
That means they won’t let your total loans exceed 80% of your home’s value.
You can slide this number up/down depending on how conservative you want to be.
4. Click “Calculate”
Nothing updates until you hit that button.
What the Results Mean (Without the Finance-Speak)
| Output | Full Name | Meaning | Why It Matters |
|---|---|---|---|
| Home Equity | Your real ownership value | Home Value − Total Loans | This is the wealth you’ve built. |
| Equity % | Equity as a percentage of your home’s value | (Equity ÷ Home Value) × 100 | If this hits ~20%, you usually qualify for removing PMI. |
| LTV | Loan-to-Value Ratio | (Total Loans ÷ Home Value) × 100 | Lower LTV = safer position. Under 80% is solid. |
| Tappable Equity | Available Equity You Can Borrow | Max Allowed Loans − Current Loans | This is what lenders may actually give you access to. |
Quick Example (Super Simple)
Say your home is worth $450,000
You owe $285,000 on your mortgage.
Home Equity = $450K − $285K = $165,000
But that does not mean the bank lets you borrow $165K.
If the lender maxes you at 80% CLTV:
80% of $450K = $360,000 allowed total debt
$360,000 allowed − $285,000 owed = $75,000 tappable
So even though you have $165K equity, only $75K is something you can use.
Equity is theoretical.
Tappable equity is spendable.
| Acronym | Full Term | Real-World Meaning |
|---|---|---|
| LTV | Loan-to-Value | How leveraged your home is. Lower = safer. |
| CLTV | Combined Loan-to-Value | Includes 1st mortgage + HELOC + all housing debt. |
| HELOC | Home Equity Line of Credit | A revolving credit line tied to your home. |
| PMI | Private Mortgage Insurance | A fee you pay if your Equity % is below ~20%. |
When This Calculator is Actually Useful
- Thinking about remodeling and want to know if it’s financially realistic
- Debating whether to get a HELOC or Home Equity Loan
- Trying to pay off other debt strategically
- Just want to know how much of your home you actually own rn
This gives you that clarity fast.
