Gross equity
Gross home equity equals the entered property value minus the first mortgage and every other secured debt entered against the property.
Homeowner equity planning
Home Equity Calculator Canada
Estimate gross equity, current combined LTV, accessible equity at target and conservative leverage limits, and net sale equity after estimated selling and discharge costs.
Gross equityCombined LTVAccessible equity scenariosNet sale equity
Calculation inputs
Measure gross, accessible, and sale equity
Enter the estimated property value and every secured balance. Then compare gross equity with borrowing room at two LTV limits and estimated net sale proceeds.
LTV and sale assumptions
How the calculation works
Understand the formula before relying on the result
Combined loan-to-value
Combined LTV divides all secured debt by the property value. It is one of the first constraints lenders review when evaluating equity take-out.
Accessible equity
The engine calculates maximum total secured debt at each entered LTV and subtracts current secured debt. The result is mathematical room, not an approval.
Net sale equity
Estimated sale equity subtracts secured debt, a percentage-based selling-cost assumption, and fixed discharge/legal costs from the entered value.
Interpret the result
Equity on paper
Gross equity can be substantial while usable equity is limited by maximum LTV, lender policy, income, credit, property, or an appraisal below the homeowner's estimate.
Target versus conservative LTV
The two limits show how lender risk appetite or property type can affect available proceeds without changing the property value or debt.
Sale equity
Net sale proceeds can be lower than gross equity because selling, legal, discharge, penalty, repair, tax, and adjustment costs reduce the amount received.
Negative or thin equity
When secured debt approaches or exceeds value, refinancing and sale options become more sensitive to appraisal, penalties, commissions, and legal costs.
Common mistakes
- Subtracting only the first mortgage and forgetting HELOC or second-mortgage balances.
- Treating an online property estimate as a lender-accepted appraisal.
- Assuming all equity above 20% can automatically be borrowed.
- Confusing a HELOC credit limit with the amount currently drawn.
- Ignoring mortgage penalties and selling costs when estimating sale proceeds.
What lenders review
- Current appraised value and property marketability.
- First mortgage, HELOC, second mortgage, liens, judgments, and other secured obligations.
- Purpose of funds and whether the structure is a refinance, HELOC, second mortgage, or sale.
- Income and credit sufficient to support the new debt.
- Property type, occupancy, location, condition, zoning, title, and lender-specific LTV limits.
Planning tips
- Use a conservative property value until an appraisal is complete.
- Enter credit limits and balances carefully; borrowing capacity may use limits while sale equity uses payouts.
- Compare refinance, HELOC, and second-mortgage structures rather than focusing only on maximum proceeds.
- Preserve a buffer for appraisal shortfall and transaction costs.
- Use the refinancing calculator to model payment, penalty, costs, and interest after deciding how much equity to access.
Connected HopeWell knowledge
Connect the home equity calculator to the mortgage decision
Use the result alongside HopeWell's guide chapters, glossary definitions, real underwriting case studies, service pages, and related calculators.
Calculation pathway
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Frequently asked questions
Questions about this calculation
How do I calculate home equity?
Subtract all debts secured against the home from its current market value. For example, a $1 million property with $600,000 of secured debt has $400,000 of gross equity.
How much equity can I borrow?
That depends on the product and lender. A common conventional refinance planning ceiling is 80% combined LTV, while a HELOC component is generally limited further. Approval also depends on income, credit, property, and policy.
Is gross equity the same as sale proceeds?
No. Selling costs, legal fees, discharge charges, mortgage penalties, repairs, taxes, and adjustments reduce net proceeds.
Why show a conservative LTV?
Some property types, locations, borrower profiles, or lender programs use lower leverage. A conservative scenario shows how sensitive proceeds are to that decision.
Does the calculator prove my property value?
No. A lender may require an appraisal or use another valuation method, and the accepted value may differ.