How Much Equity Do I Have? The 2026 Homeowner Math
Written by the 4Homes Editorial Team · Reviewed by 4Homes staff · NMLS #2787839
Published July 22, 2026 · Updated July 22, 2026
2 min read
How Much Equity Do I Have? The 2026 Homeowner Math
In this article
Home equity is simple on paper: your home's value minus what you owe. Usable equity is the number that matters. That is the amount a lender may let you borrow without pushing the loan too close to the home's value.
If your home is worth $700,000 and you owe $420,000, you have about $280,000 in gross equity. You probably cannot borrow all of it. Most loan programs leave a cushion in the property.
Start with the rough equity number
Use a realistic home value, not the highest number from a listing site. Then subtract your current mortgage balance and any second mortgage or HELOC balance. The result is gross equity.
From there, apply the lender's max loan-to-value limit. If a lender allows 80% total loan-to-value on a $700,000 home, the total debt cap is about $560,000. If you owe $420,000 today, the rough available room is $140,000 before costs and final underwriting.
HELOC or cash-out refinance?
A HELOC can make sense when you like your current first mortgage and want flexible access to equity. You keep the first loan and add a line of credit behind it.
A cash-out refinance replaces the current mortgage with a new larger one. That can be useful when the full loan structure is better, but it can be expensive if you are giving up a low existing rate.
When selling beats borrowing
Borrowing against equity keeps you in the house. Selling unlocks the equity outright, but then you need somewhere to go. The right answer depends on the new payment, taxes, moving costs, and whether you want to stay in the home long enough for borrowing to make sense.
Bottom line
Do not plan from gross equity alone. Use usable equity. Then compare a HELOC, cash-out refinance, and sale side by side before you move any money around.
Frequently asked questions
Can I borrow 100% of my equity? Usually no. Most lenders leave a cushion in the property, and the limit depends on the loan type, credit, occupancy, and property.
Does a HELOC change my first mortgage? No. A HELOC is usually a second lien, so your current first mortgage stays in place.
Key Takeaways
- 1Home equity is estimated home value minus mortgage debt, but usable equity is usually smaller
- 2Many lenders want a cushion left in the home, commonly around 15% to 20% depending on program and credit
- 3A HELOC keeps your current first mortgage in place; a cash-out refinance replaces it
- 4Selling can free up more equity than borrowing, but it also creates moving costs and a new housing payment