Home Equity Growth Calculator
Example: Current home value: 400000 $ · Current loan balance: 300000 $ · Interest rate (APR): 6.5 % · Remaining loan term: 28 years · Annual appreciation rate: 3.5 % · Years to project: 10 years
| Projected equity | $320,561 |
| Projected home value | $567,338 |
| Projected loan balance | $246,776 |
Worked example
Start with a $400,000 home, a $300,000 balance at 6.5% with 28 years left, and 3.5% appreciation. Over 10 years the home grows to about $564,000, while payments bring the loan down to roughly $233,000. Your equity climbs from $100,000 today to about $331,000 — most of the gain from appreciation, the rest from paying down principal. Both forces work in your favor at the same time.
Frequently asked questions
What is home equity?
Equity is the portion of your home you actually own — the current market value minus what you still owe on the mortgage and any other liens. It rises as you pay down the loan and as the home appreciates, and it is a major component of most homeowners net worth.
Which grows equity faster, paydown or appreciation?
Over a typical horizon, appreciation usually dominates because it compounds on the full home value, while loan paydown is slow in the early years when most of your payment is interest. In a flat or falling market, though, paydown may be the only source of equity growth.
Can I lose equity?
Yes. If home values fall faster than you pay down the loan, your equity shrinks and can even go negative, leaving you owing more than the home is worth. Using a conservative appreciation rate here guards against an overly rosy projection.
How can I use my equity?
You can tap it through a home equity loan, a HELOC, or a cash-out refinance, or realize it by selling. Each has costs and risks, and borrowing against equity puts your home on the line, so weigh it carefully against the projected balance shown here.