Home Equity & LTV Calculator 2026 – HELOC & Cash-Out Refinance
Calculate home equity, loan-to-value ratio, and HELOC borrowing capacity. Understand your equity position for refinancing or home equity loans.
Home Equity & LTV Calculator 2026 – HELOC & Cash-Out Refinance
Introduction
Home equity is your home's value minus what you owe. It's financial leverage you can tap for renovations, debt consolidation, or investments. A Home Equity Calculator shows how much equity you have and how much you can borrow against it.
Key Metrics
Home Equity
Formula: Home Value - Mortgage Balance = Equity
Example: $500,000 home - $300,000 owed = $200,000 equity
Loan-to-Value (LTV) Ratio
Formula: (Mortgage Balance / Home Value) × 100
Example: ($300,000 / $500,000) × 100 = 60% LTV
Lower LTV = More equity = Better refinance rates.
How Much Can You Borrow?
HELOC (Home Equity Line of Credit)
Most lenders allow you to borrow up to 85% of your home's value minus your existing mortgage.
Formula: (Home Value × 0.85) - Mortgage Balance
Example:
- Home Value: $500,000
- Mortgage: $300,000
- Max HELOC: ($500,000 × 0.85) - $300,000 = $125,000
Cash-Out Refinance
Refinance for more than you owe and pocket the difference. Lenders typically cap at 80% LTV.
Example:
- Home Value: $500,000
- Current Mortgage: $300,000
- Max New Loan (80% LTV): $400,000
- Cash Out: $400,000 - $300,000 = $100,000
FAQ
Q: What's better, HELOC or cash-out refinance? A: HELOC if rates are low and you only need occasional access to funds. Cash-out refinance if you want a lump sum and can lock in a good rate.
Q: Does using home equity affect my credit? A: Yes, it's a debt. Manage it responsibly.
Related Tools
- Mortgage Calculator: /calculator/04-mortgage-calculator
- Refinance Calculator: /calculator/008-refinance-break-even-closing-costs
Conclusion
Your home is often your largest asset. Use the Home Equity Calculator to understand how to leverage it wisely without overextending yourself.
Key Takeaways
- Prioritize high-interest debt to minimize total interest paid over time
- Compare debt payoff strategies like avalanche vs. snowball to find your best approach
- Even small extra payments can significantly reduce your total repayment timeline
How to Use This Calculator
- Enter your financial details in the fields above
- Adjust parameters to match your specific situation
- Review the calculated results and projections
- Compare different scenarios to find the optimal strategy
Tips for Better Results
- Use realistic estimates based on current market conditions
- Update your calculations regularly as your situation changes
- Consider consulting a financial advisor for complex decisions
- Remember that calculator results are estimates, not guarantees