Home Equity Calculator: Equity Now and Projected Growth
Enter your home's value, your mortgage balance, and a few assumptions to see the equity you have today and where it heads, with appreciation and principal paydown shown as separate engines. The bar splits the value into debt and equity, and the table walks it forward year by year.
A realistic current market value, not the purchase price
What you still owe, all liens combined
Home prices have historically grown a few percent a year on average; local markets vary
Sets how fast your payments retire principal
Years left on the loan
How far out to project
Equity today
$150,000
33% of a $450,000 home is yours
Equity in 5 years
$249,987
$521,673 projected value minus a $271,686 balance
Tappable today at 80% CLTV
$60,000
what a lender capping combined LTV at 80% might extend
Growth from appreciation
$71,673
3.0% a year, compounding on the full value for 5 years
Growth from principal paydown
$28,314
$2,026 monthly payments retiring the balance
Where the value sits today
- Mortgage debt$300,00067%
- Your equity$150,00033%
Year by year at 3.0% appreciation
| Year | Home value | Mortgage balance | Equity |
|---|---|---|---|
| Today | $450,000 | $300,000 | $150,000 |
| 1 | $463,500 | $295,047 | $168,453 |
| 2 | $477,405 | $289,762 | $187,643 |
| 3 | $491,727 | $284,123 | $207,604 |
| 4 | $506,479 | $278,106 | $228,373 |
| 5 | $521,673 | $271,686 | $249,987 |
Appreciation compounds on the whole value while payments chip at the balance, so equity grows faster than either engine alone. A flat or falling market switches off the first engine, not the second.
Two engines, running at different speeds
Home equity is the slice of your home you own outright: what it would sell for minus what you owe on it. It grows through two separate mechanisms. Appreciation raises the value, and it compounds on the entire price of the home, not just the share you have paid for, which is what makes leverage in housing so powerful. Principal paydown lowers the balance, and it runs on the loan's schedule: slow in the early years when most of each payment is interest, faster later on. The calculator keeps the two apart so you can see which one is doing the work in your situation.
How the projection is built
Equity today is value minus balance. For each future year, the value grows by your appreciation rate, compounded annually, while the balance follows a standard fixed-rate schedule built from the rate and the years left on the loan (the amortization calculator shows one in full). The monthly payment is computed from those two inputs, each month's interest is deducted from it, and the remainder retires principal. Equity in a future year is the projected value minus the projected balance. Tappable equity applies a common lender ceiling of 80% combined loan-to-value: 80% of today's value, minus the balance, is roughly what a second lien could add.
A worked example at 3% a year
A $450,000 home with a $300,000 mortgage at 6.5% and 25 years remaining starts with $150,000 of equity. Five years on, 3% appreciation lifts the value to about $521,700, adding roughly $71,700. Payments of about $2,026 a month retire close to $28,300 of principal in the same span. Equity lands near $250,000, with appreciation providing more than two-thirds of the gain. Tappable equity today, under an 80% cap, is $60,000: 80% of $450,000 is $360,000, less the $300,000 owed.
What tapping it costs, and why equity is not cash
Borrowing against equity is still borrowing. A HELOC or home equity loan converts a paper gain into a real monthly payment secured by the house, and the HELOC calculator shows what a full draw costs each month. That is worth remembering when a projection looks exciting: $250,000 of equity is wealth, and it belongs in your net worth, but it is not liquid, it moves with a market you do not control, and turning it into spendable dollars means either selling or adding debt. The calmer use of this number is planning: knowing when PMI can come off, whether a refinance or a sale makes sense, and how much of your net worth sits in a single asset.
Frequently asked questions
How do I calculate home equity?
Subtract everything you owe against the home from what it would realistically sell for. A $450,000 home with a $300,000 mortgage has $150,000 of equity, about a third of the value. Include any home equity loan or HELOC balance on the debt side: equity is what would be left after every lien is paid off at a sale, before selling costs.
How fast does home equity grow?
Two engines run at once. Appreciation compounds on the whole value, so 3% a year on $450,000 adds roughly $13,500 in the first year and a little more each year after. Principal paydown starts slow and accelerates: on a $300,000 loan at 6.5% with 25 years left, the first five years retire close to $28,000. Together that turns $150,000 of equity into roughly $250,000 in five years, though real markets do not move in straight lines.
How much of my equity can I borrow?
Lenders typically cap all liens combined near 80% of value, sometimes higher for strong borrowers. On a $450,000 home that cap is $360,000 of total debt, so with a $300,000 mortgage about $60,000 is tappable, not the full $150,000. Credit, income, and your debt-to-income ratio decide what a lender actually offers.
Is home equity part of my net worth?
Yes. Your home's value counts as an asset and the mortgage as a liability, so the equity is what flows into net worth. It is real wealth, but illiquid: you cannot spend it without selling or borrowing against it, and both have costs. Tracking it alongside cash and investments keeps the full picture honest.
What happens to my equity if home prices fall?
Appreciation runs in reverse while paydown keeps working. A 10% drop on a $450,000 home erases $45,000 of equity, which is why buyers with small down payments can briefly owe more than the home is worth early in a loan. Nothing is lost unless you sell into the dip; continuing to pay rebuilds equity through the loan balance while prices recover.
Does this calculator save my numbers?
No. Everything runs in your browser and nothing you type is stored or sent anywhere.
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