How do I calculate my home's equity?

Home equity is one of the most powerful wealth-building tools homeowners have. To calculate your equity accurately, you need two numbers. The first is your home's current market value, which you can estimate through online valuation tools, a recent appraisal, or a comparative market analysis from a real estate agent. The second is your remaining mortgage balance, which you can find on your most recent mortgage statement or by logging into your lender's online portal. Your equity is the difference. For example, if your home is worth $350,000 and your mortgage balance is $200,000, you have $150,000 in equity, which represents about 43% of your home's value. Your equity increases in two ways: through amortization, where each mortgage payment reduces your principal balance, and through appreciation, where your home's market value increases over time. You can also build equity faster by making extra principal payments or by making improvements that increase your home's value. Home equity can be accessed through a home equity loan, home equity line of credit (HELOC), or cash-out refinance.