How Can I Tell How Much Equity I Have in My Home?

Home equity represents the portion of your home’s value that you own. It reflects the principal paid on your mortgage and any appreciation in your property’s market value. This article guides homeowners on how to determine their current home equity.

Ascertaining Your Home’s Current Market Value

Determining your home’s current market value is the first step in calculating equity. Various methods offer different levels of precision and cost. A professional appraisal is the most accurate method, often required during refinancing or when selling. An independent appraiser conducts a thorough inspection and analyzes recent sales of comparable properties in the area, factoring in location, size, and amenities. A professional appraisal typically costs $300 to $600, depending on property complexity and location.

Another approach is obtaining a Comparative Market Analysis (CMA) from a real estate agent. A CMA involves an agent evaluating your property against recently sold homes and current listings in your neighborhood to estimate its market price. This service is often provided without charge. While a CMA offers a helpful snapshot of market conditions, it does not carry the same legal weight or detailed analysis as a professional appraisal.

Online valuation tools offer a quick, free estimate of your home’s value. These tools use algorithms that process public data, including property tax records, past sales, and neighborhood trends. However, these estimates are general approximations. They may not account for unique property features, recent renovations, or specific local market nuances that an appraiser or agent would consider. Using current, accurate market value information is important for a reliable equity calculation.

Identifying Your Outstanding Mortgage Balance

After determining your home’s market value, identify your outstanding mortgage balance. Use the current principal balance of your loan, not the original amount borrowed, as this figure decreases with each payment. Your monthly mortgage statement is a primary source, listing the remaining principal balance.

Many mortgage servicers provide online portals to access account details. Logging into your lender’s website allows you to view your outstanding principal balance and other loan specifics. If you cannot find this information through statements or online, contact your mortgage servicer directly by phone for an accurate balance. Precision in this figure is important because it directly impacts the accuracy of your home equity calculation.

Performing the Equity Calculation

Once market value and mortgage balance are known, calculating home equity is simple. The formula is subtracting your outstanding mortgage balance from your home’s current market value. This calculation provides a clear representation of the portion of your home you own.

For example, if your home’s current market value is estimated at $400,000 and your outstanding mortgage balance is $250,000, the calculation would be $400,000 – $250,000, resulting in $150,000 of home equity. A positive result indicates accumulated equity. Conversely, if your outstanding mortgage balance exceeds your home’s current market value, the result would be a negative number, signifying “negative equity” or an “underwater” mortgage. This means you owe more on your home than it is currently worth.

Remember that this calculated equity is a snapshot. Home values fluctuate with market conditions, and your mortgage principal decreases with regular payments, causing your equity to change over time.

Citations

The average cost of a home appraisal ranges from $300 to $600. [Source: HomeAdvisor, “How Much Does A Home Appraisal Cost?”, https://www.homeadvisor.com/cost/appraisal-services/cost-of-a-home-appraisal/ (Accessed August 20, 2025)]
Home equity is calculated by subtracting your outstanding mortgage balance from your home’s current market value. [Source: Investopedia, “Home Equity”, https://www.investopedia.com/terms/h/home_equity.asp (Accessed August 20, 2025)]