How to Calculate your Home Equity

Calculating home equity is not overly complicated. All you need to know is the value of your home and how much you still owe on your current mortgage.

In order to learn the accurate value of your home, have it appraised by a professional. Keep the quoted figure in mind.

The next piece of information that you will need is the amount that you owe on your mortgage, which can be found on your most recent mortgage statement. Find the total amount remaining on your mortgage (this is how much you have yet to pay).  Remember this figure.

The next step in calculating home equity is to subtract the remaining balance owed on your home from the appraised value of your home. The resulting figure is the amount of equity available.

To illustrate, let's say that your home was appraised at \$200,000. According to your mortgage statement, you still owe \$150,000 on your loan.

\$200,000 - \$150,000 = \$50,000

With these figures, the home equity is \$50,000.

It is important to note that your home equity is not constant. Your home could appreciate or depreciate depending on the current market, renovations, and how much you pay on your mortgage.