How Much Home Equity Do You Actually Have? (And How to Use It)
Home equity = your home's current market value minus what you still owe on it. Most homeowners underestimate theirs because they rely on Zestimates instead of an actual market analysis. Equity matters because it's what funds your next move — through a sale, a HELOC, a cash-out refinance, or a program like Equity Move.
What is home equity?
Home equity is the portion of your home’s current market value that you actually own outright. The formula:
Home equity = current market value − total amount owed on the home
If your home is worth $500,000 and you owe $300,000 on the mortgage, you have $200,000 in equity.
How do I figure out what my home is actually worth?
Three sources, ranked by reliability:
- A comparative market analysis (CMA) from a local agent. Free, takes a few days, and is grounded in recent comparable sales the agent has actually walked through. This is the gold standard short of a paid appraisal.
- A formal appraisal. ~$500–700, used for refinances and program qualification. Most rigorous, but rarely necessary just to know roughly where you stand.
- Online estimates (Zestimate, Redfin Estimate, Realtor.com). Free and instant, but the median error is 2–7% and can be much higher for renovated, oversized, or unusual homes. Useful as a starting point — risky as a basis for decisions.
For decisions that involve real money, never rely on a Zestimate alone.
How do I figure out what I owe?
Log into your mortgage servicer’s portal and check the current principal balance. Don’t use the original loan amount — you’ve been paying it down. If you have a HELOC or second lien, add those balances too.
Why does my equity number matter for moving?
Your equity is, in practical terms, the down payment on your next home. It’s also the determining factor for:
- Whether you qualify for buy-before-sell programs like Equity Move
- Whether a HELOC or cash-out refinance makes sense as a bridge
- How much house you can realistically afford next
- Whether selling makes financial sense at all in the current market
Four ways to put equity to work
| Option | When it fits | Watch out for |
|---|---|---|
| Sell | Moving to a new home, downsizing, relocating | Transaction costs (~6–8% of sale price) |
| HELOC | Need flexibility, want to keep the home | Variable rates, short draw period |
| Cash-out refinance | Want a lump sum at a fixed rate | Resets your mortgage clock; rate may be higher than current |
| Equity Move program | Want to buy next home before selling current | Program fees; sell-side timeline still applies |
Common mistakes
- Treating Zestimate as fact. It’s a starting point, not a basis for offers or programs.
- Forgetting transaction costs. Selling a home costs roughly 6–8% of the sale price between commissions, prep, and closing costs. A $500K sale nets ~$465K, not $500K.
- Ignoring tax implications. The capital gains exclusion ($250K single / $500K married) covers most homeowners, but high-equity sellers in expensive markets can owe meaningful tax.
- Underestimating timeline. Even in a fast market, “decide to sell” to “money in account” is 60–90 days minimum.
Next step
Want a real number for your equity, not a guess? Request a free, no-pressure CMA — we’ll deliver an honest range within 48 hours. Get in touch →
