{"id":45714,"date":"2025-07-07T04:19:45","date_gmt":"2025-07-07T11:19:45","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=45714"},"modified":"2025-07-07T22:26:21","modified_gmt":"2025-07-08T05:26:21","slug":"buyer-how-to-calculate-home-equity","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-how-to-calculate-home-equity\/","title":{"rendered":"How to Calculate Home Equity \u2014 and Unlock Funds You Need"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">While it may initially seem complex, how to calculate home equity is actually quite simple. What may be more difficult is deciding how and when to use your <\/span><a href=\"https:\/\/www.homelight.com\/blog\/what-is-home-equity\/\"><span style=\"font-weight: 400;\">home equity<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unlocking funds from your home can bring exciting life changes or be a well-timed financial lifesaver.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In this post, we\u2019ll show you four easy steps to calculate your home\u2019s equity and help you tap into what you need \u2014 and what to consider before you do.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\n\n\n\n\n<div class=\"geo-cta widget-cta widget-cta--content     widget-cta--dark widget-cta--dark-blue-gradient\">\n    <div class=\"widget-element--content\">\n        <div class=\"widget-element--content-header\">\n            <img decoding=\"async\" alt=\"homelight logo\" class=\"widget-element--logo\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/themes\/ccprototypev5\/images\/logo-small-cta.png\" width=\"106\" height=\"25\" \/>\n        <\/div>\n        \n                <h3 class=\"cta-headline widget--bold\">A quick (and free) way to check your home value<\/h3>\n                        <p class=\"p1\">Get a preliminary home value estimate in as little as two minutes. Our tool uses information from multiple sources to give you a range of value based on current market trends.<\/p>\n        \n                <div class=\"widget-element--buttons\">\n            <a data-type=\"In Content CTA\" href=\"https:\/\/www.homelight.com\/simple-home-value\/quiz?#\/qaas=0\/\" class=\"cta-click-track widget-element--button\">Check now<\/a>\n        <\/div>\n                    <\/div>\n<\/div>\n\n<\/span><\/p>\n<h2>How to calculate your home equity<\/h2>\n<p><span style=\"font-weight: 400;\">Calculating your home equity involves a few simple steps, which we\u2019ll share below.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Many banks and lending companies also provide <\/span><a href=\"https:\/\/www.google.com\/search?q=home+equity+calculator\"><span style=\"font-weight: 400;\">online home equity calculators<\/span><\/a><span style=\"font-weight: 400;\">. But whether you use a commercial website tool or prefer your own calculator, you&#8217;ll first need to <\/span><a href=\"https:\/\/www.homelight.com\/blog\/property-value-lookup\/\"><span style=\"font-weight: 400;\">determine your home\u2019s estimated value<\/span><\/a><span style=\"font-weight: 400;\"> and how much you still owe on your mortgage.<\/span><\/p>\n<div id=\"section--1\" data-toc-header=\"1: Determine home value\" data-toc-type=\"head\"><\/div>\n<h2>Step 1: Determine your home\u2019s value<\/h2>\n<p><span style=\"font-weight: 400;\">The first step in calculating your home equity is determining your home\u2019s current <\/span><a href=\"https:\/\/www.homelight.com\/blog\/fair-market-value\/\"><span style=\"font-weight: 400;\">fair market value<\/span><\/a><span style=\"font-weight: 400;\">. The market value of your home refers to what a homebuyer would likely pay to purchase your property right now. You can do this by:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Getting a <\/span><a href=\"https:\/\/www.homelight.com\/blog\/how-much-is-a-house-appraisal\/\"><span style=\"font-weight: 400;\">professional appraisal<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Using online <\/span><a href=\"https:\/\/www.homelight.com\/blog\/free-online-home-value-estimators-compared\/\"><span style=\"font-weight: 400;\">home value estimators<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Comparing recent sales of <\/span><a href=\"https:\/\/www.homelight.com\/blog\/comps-for-my-house\/\"><span style=\"font-weight: 400;\">similar homes in your area<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Asking a trusted real estate agent for a <\/span><a href=\"https:\/\/www.homelight.com\/blog\/how-do-i-get-a-comparative-market-analysis\/\"><span style=\"font-weight: 400;\">comparative market analysis<\/span><\/a><span style=\"font-weight: 400;\"> (CMA)<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">To get a preliminary estimate on what your home may be worth, try HomeLight\u2019s <\/span><a href=\"https:\/\/www.homelight.com\/home-value-estimator\"><span style=\"font-weight: 400;\">Home Value Estimator<\/span><\/a><span style=\"font-weight: 400;\">. Simply answer a <\/span><a href=\"https:\/\/www.homelight.com\/simple-home-value\/quiz?#\/qaas=0\/\"><span style=\"font-weight: 400;\">few questions<\/span><\/a><span style=\"font-weight: 400;\"> about your home. This free tool analyzes the records of recently sold homes near you, your home\u2019s last sale price, and other market trends to provide a ballpark range of value in under two minutes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When it comes time to apply for an equity-based loan, lenders will typically use your home\u2019s professionally appraised value to determine your total equity and how much you can borrow.<\/span><\/p>\n<div id=\"section--2\" data-toc-header=\"2: Find mortgage balance\" data-toc-type=\"head\"><\/div>\n<h2>Step 2: Find your current mortgage balance<\/h2>\n<p><span style=\"font-weight: 400;\">Next, you need to find your current mortgage balance. This information is often available on your latest mortgage statement or by logging into your lender\u2019s online portal or app. You can also email or call your lender to ask for your current loan balance.<\/span><\/p>\n<div id=\"section--3\" data-toc-header=\"3: Subtract loan balance\" data-toc-type=\"head\"><\/div>\n<h2>Step 3: Subtract the loan balance from your home value<\/h2>\n<p><span style=\"font-weight: 400;\">Once you have both your home\u2019s value and your current mortgage balance, subtract the loan balance from the home value. The formula looks like this:<\/span><\/p>\n<p style=\"text-align: center;\"><i><span style=\"font-weight: 400;\">Home value &#8211; mortgage balance = home equity<\/span><\/i><\/p>\n<p style=\"text-align: center;\"><i><span style=\"font-weight: 400;\">Example: $420,000 home value &#8211; $200,000 loan balance = $220,000 of equity<\/span><\/i><\/p>\n<div id=\"section--4\" data-toc-header=\"4: Convert to percentage\" data-toc-type=\"head\"><\/div>\n<h2>Step 4: Convert the difference into a percentage<\/h2>\n<p><span style=\"font-weight: 400;\">To convert your home equity into a percentage, use the following formula:<\/span><\/p>\n<p style=\"text-align: center;\"><i><span style=\"font-weight: 400;\">(Home equity divided by Home value) x 100 = Home equity percentage<\/span><\/i><\/p>\n<p style=\"text-align: center;\"><i><span style=\"font-weight: 400;\">Example: $220,000 divided by $420,000 x 100 = 52.38%<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">This percentage represents how much of your home you truly own and can access for financial needs. As you can see in our example, the equity in this home is more than half the property\u2019s current value.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>See how to calculate home equity using 4 simple steps. Learn how much equity you have, how much you can unlock, how long it takes, and the costs.<\/p>\n","protected":false},"author":298,"featured_media":45721,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[192,629,632],"tags":[],"class_list":["post-45714","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-buyers","category-home-financing","category-mortgage-loans"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.0 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How to Calculate Home Equity \u2014 and Unlock Funds You Need<\/title>\n<meta name=\"description\" content=\"See how to calculate home equity using 4 simple steps. 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