Equity versus what you can borrow
Your equity is your home's value minus what you owe. You usually can't borrow all of it: lenders cap total borrowing at a loan-to-value limit, leaving part of the equity as a buffer.
Worked example
A £350,000 home with a £200,000 mortgage has £150,000 of equity. At an 80% loan-to-value limit, you could borrow up to about £80,000 of it.
Before you borrow
House prices can fall, which reduces your equity. Your home may be repossessed if you don't keep up repayments on a loan secured on it.
A lender will also value the property and check affordability, so the amount you can actually borrow may be lower.
How the result is worked out
The extra you could borrow is the home value multiplied by the maximum loan-to-value you enter, minus any borrowing already secured on it. Your equity is the value minus that existing borrowing.
A bank's own valuation may differ from the figure you enter, which changes the result.
Inputs for the home equity loan value calculator
Home value
What your home is worth now.
Existing borrowing secured on it
Your outstanding mortgage and any other secured loans.
Maximum loan-to-value
The lender's limit on total borrowing as a share of the value.
CALCULATOR QUESTIONS
Home equity loan value calculator questions
How do I calculate my home equity?
Subtract what you owe from your home's value. £350,000 minus £200,000 is £150,000.
Can I borrow all my equity?
Usually not. Lenders cap total borrowing at a loan-to-value limit.
What if house prices fall?
Your equity shrinks, which could limit future borrowing.
What's the risk?
Because a home equity loan is secured on your home, falling behind with payments can lead to repossession.