How the home equity calculation works
Your home equity is the share of your property you actually own: the current market value of your home minus everything you still owe on it. If your home is worth $450,000 and you owe $260,000, you have $190,000 of equity — but you usually can't borrow all of it. Lenders limit how much of your home's value can be tied up in loans at once, a figure called the combined loan-to-value ratio (CLTV).
1. Your total equity
Home value − mortgage balance. This is your net ownership stake, though it isn't all available to borrow.
2. The lender's ceiling
Lenders let you borrow up to a maximum percentage of your home's value — often 80% to 90% combined. At an 85% cap on a $450,000 home, the most total debt allowed is $382,500.
3. Your available borrowing power
Subtract what you already owe from that ceiling: $382,500 − $260,000 = $122,500 of potential HELOC or home equity loan borrowing.
Pick the right tool
Frequently asked questions
How much equity do I need to borrow?
Most lenders want you to keep at least 10–20% equity after borrowing, so you typically need more than 20% equity built up before a HELOC or home equity loan makes sense.
What is a good loan-to-value ratio?
Lower is safer and cheaper. A combined LTV under 80% usually unlocks the best rates; many lenders go to 85–90% at higher rates. See what counts as a good LTV.
Does this calculator run a credit check?
No. It's a private, browser-based estimate. Nothing you type is sent anywhere or affects your credit.
Why can't I borrow all of my equity?
Lenders keep a cushion in case home prices fall, so they cap total borrowing at a percentage of the home's value.
Is home equity interest tax-deductible?
Sometimes — generally only when the funds are used to buy, build or substantially improve the home securing the loan. See the tax rules and confirm with a professional.