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$
Enter a positive USD estimate up to $1 billion.
$
Use the unpaid principal balance, not the monthly payment.
$
Include every other lien secured by the home.
%
Use a current policy limit supplied by the lender you are evaluating.
± %
From 0% to 50% around the entered home value.
Optional context only; leaving it blank does not change the calculation.
Optional context only; a payoff amount can differ from a current balance.
Equity snapshot
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Calculation method:
These values feed the summary, context, chart, table, and exports.
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Borrowing context
Entered maximum CLTV comparison
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The chart renderer is unavailable. The same values remain available in the scenario ledger.

ScenarioHome valueSecured balancesGross equityCombined LTVEst. headroomCopy
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Home equity is the part of a property's estimated value that is not offset by debts secured by the property. It can rise when the home value increases or secured balances fall, and it can shrink when values decline or new liens are added. Because both sides change over time, equity is a dated estimate rather than a fixed account balance.

Gross equity is useful for a quick snapshot, but it is not the same as cash available from a sale or loan. Selling costs, taxes, repairs, payoff interest, fees, and lender rules can reduce what is actually available. A current mortgage balance can also differ from a payoff amount, which may include interest through a specific date and other charges.

Borrowing decisions often use combined loan-to-value, or CLTV. This ratio compares all included home-secured balances with the property's value. A lower CLTV generally leaves more value outside the secured debt, while a ratio above 100% indicates that included balances exceed the entered home value.

MeasureUseful forDoes not establish
Gross equityValue-minus-debt snapshotNet sale proceeds
CLTVComparing secured debt with valueLoan eligibility by itself
Arithmetic headroomTesting an entered CLTV ceilingAn offer, approval, or credit limit
Value sensitivitySeeing how one valuation change affects the resultA forecast or appraisal

A lender may use an appraisal method, property-value definition, lien treatment, product limit, and underwriting standard that differ from a personal estimate. Credit, income, occupancy, property type, state law, and loan terms can all affect a real application.

Borrowing against a home converts some housing wealth into secured debt. Missed payments can put the property at risk, so the arithmetic should be considered alongside payment affordability, fees, rate changes, and alternatives that do not use the home as collateral.

How to Use This Tool:

Use values and balances from roughly the same date so the snapshot is internally consistent.

  1. Enter a positive Estimated home value, the unpaid principal First mortgage balance, and every Other secured balance included in the comparison. Use a current value estimate and balances, not the original price or monthly payment.
  2. Set Maximum combined LTV to the current policy ceiling supplied by the lender or scenario you are testing. It is an assumption, not a universal limit.
  3. Choose a Home-value sensitivity from 0% to 50% to compare lower, entered, and higher valuation scenarios while keeping all debts unchanged.
  4. Check gross equity, CLTV, and headroom together. If the result is for a payoff or application, replace current balances with lender-provided figures and obtain the required valuation.

Interpreting Results:

Gross equity can be positive, zero, or negative. Equity percent expresses that amount as a share of the entered home value. Current combined LTV expresses the opposite side of the same snapshot: included secured balances divided by value.

  • Within entered CLTV limit means the arithmetic ratio does not exceed the supplied ceiling. It does not mean a lender will approve borrowing.
  • Above entered CLTV limit means the current ratio is greater than the supplied ceiling, so calculated headroom is zero.
  • Negative equity means included secured balances exceed the entered value.
  • Estimated borrowing headroom never falls below zero and does not subtract closing costs, fees, or product-specific reserves.

Technical Details:

Equity and CLTV use the same value and debt inputs but answer different questions. Equity is a currency amount left after subtracting secured balances. CLTV is a percentage showing how large those balances are beside the home value. The entered maximum CLTV creates a scenario ceiling from which arithmetic headroom is derived.

Formula Core:

All monetary results use US dollars. Money is rounded to cents, and percentages are rounded to six decimal places after calculation.

B=Bfirst+Bother E=V-B CLTV=BV×100% H=max(0,V×L100-B)
SymbolMeaningBoundary
VEntered home valueGreater than zero
BTotal included secured balanceFirst mortgage plus other secured balances
LEntered maximum CLTVGreater than 0% and no more than 100%
HEstimated borrowing headroomFloored at zero

Value sensitivity changes only V. The lower scenario multiplies the entered value by 1 minus the sensitivity percentage, and the higher scenario multiplies it by 1 plus that percentage. Secured balances and the entered CLTV ceiling stay fixed, which isolates the effect of valuation.

For a home value of $500,000, a $280,000 first mortgage, and $20,000 in other secured debt, total secured balances are $300,000. Gross equity is $200,000 and CLTV is 60%. At an entered 80% ceiling, arithmetic headroom is $100,000 before fees, underwriting, or product limits.

Limitations:

This is an educational financial estimate, not financial advice, an appraisal, a payoff quote, an offer, or a lending decision.

  • Market value can change and may differ from a lender's accepted appraisal.
  • Current principal balances can differ from dated payoff amounts.
  • Closing costs, taxes, interest, fees, liens not entered, and sale expenses are excluded.
  • Real borrowing depends on lender policy, credit, income, property, occupancy, and jurisdiction.

References: