Home Equity Calculator — LTV, HELOC & PMI

Frequently Asked Questions

What is home equity?

Home equity is the portion of your home's value that you own outright — current market value minus the remaining mortgage balance. If your home is worth $400,000 and you owe $280,000, you have $120,000 in equity (30%). Equity builds through principal payments, home appreciation, and any improvements that increase value.

What is loan-to-value (LTV) ratio?

LTV is your mortgage balance divided by your home's current value, expressed as a percentage. An LTV of 70% means you owe 70% of what the home is worth. Lenders use LTV to assess risk — lower LTV means more equity and lower risk. Most lenders require LTV ≤ 80% for HELOCs, cash-out refinances, and PMI removal.

How much can I borrow against my home equity?

Most lenders allow you to borrow up to a combined LTV of 80–85% — meaning your existing mortgage plus the new HELOC or home equity loan can't exceed that percentage of your home's value. The exact limit depends on the lender, your credit score, and current market conditions.

How do I remove PMI from my mortgage?

Once your LTV reaches 80% (you have 20% equity), you can request PMI cancellation from your lender. Under federal law (Homeowners Protection Act), lenders must automatically cancel PMI when your balance reaches 78% of the original purchase price based on your scheduled payments. If your home has appreciated, you may be able to request early cancellation with a new appraisal.

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