How Is Housing Equity Calculated?

Discover your home's equity in a few simple steps.

Discover your home's equity in a few simple steps.

The equity in your home fluctuates based on market conditions and the amount you owe on your home. If you owe more than your house is worth, you have negative equity. If you owe less than the value of your home, you have positive equity. While it isn’t necessary to keep tabs on your equity constantly, you’ll find the information helpful if you’re thinking about selling your property or applying for a home equity loan.

Find the fair market value of your house. If you want a quick estimate, use a free online valuation site, such as Zillow, eppraisals.com or House Values.com. These sites use your address to provide value estimates. A professional appraiser will provide the most accurate assessment, so if you’re looking for the actual value of your home, hire an appraiser or find one through the American Society of Appraisers or the Appraisal Institute. Appraisers from these national organizations are bound by a code of ethics and professional standards.

Calculate your mortgage balance. Most mortgage statements show the balance of your loan. If your most recent statement doesn’t show your balance, or you’ve lost your statement, contact your mortgage lender for the information. If you have more than one mortgage on your house, you’ll need to combine the balances from all the loans.

Subtract your mortgage balance from the fair market value of your house. The result is the amount of equity in your home.


  • If you're applying for a home equity loan, many lenders extend a loan of up to 80 percent of your equity. You may not be able to borrow against all the equity in your house.

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About the Author

With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.

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