How Much Equity Do I Have in My Home?

Equity is the part of your home you truly own — and knowing how much you have shapes your remortgage options, the rates you can access, and whether you can release cash.

Your home equity is simply the current market value of your property minus the outstanding balance on your mortgage. If your home is worth £300,000 and you owe £180,000, you have £120,000 of equity, or 40% of the property's value.

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How to Work Out Your Equity

There are just two numbers involved, and one of them you already know.

1. Find your mortgage balance. Check your latest statement or your lender's app for the exact outstanding amount.
2. Estimate your property's value. Use recent sold prices and the Land Registry index — the free house value calculator gives you a postcode-based figure in seconds.
3. Subtract. Value minus balance is your equity in pounds.
4. Convert to a percentage. Divide your equity by the value and multiply by 100.

That percentage is the mirror image of your loan-to-value ratio. If you have 40% equity, your loan-to-value is 60%.

Why Your Equity Matters

Equity isn't just a number for interest's sake — it directly affects your finances.

• Better mortgage rates. More equity means a lower loan-to-value, and lenders reserve their sharpest rates for lower LTVs. See how loan-to-value impacts mortgage repayments.
• Borrowing power. Equity can be released through a remortgage to fund home improvements, a deposit on another property, or debt consolidation.
• A financial cushion. Equity is real wealth you can access when you sell or downsize.

How Equity Grows

Your stake in your home builds in two ways, often at the same time.

Paying down the mortgage. Every capital repayment reduces your balance, so on a repayment mortgage your equity rises a little each month. Interest-only mortgages don't reduce the balance, so equity only grows if the value does.

Rising property values. If your area's prices climb, your equity increases even though your mortgage balance hasn't changed. You can estimate this using the House Price Index or by checking how much your house has gone up in value.

Releasing Equity

Once you've built up equity, you may be able to convert some of it into cash by remortgaging for a larger amount than you currently owe. This is known as a remortgage to release equity. You still have to pass affordability checks, and most lenders cap how much of the value you can borrow — often around 90%.

For older homeowners, equity release products offer another route, though they work differently and carry long-term costs. Take advice before going down that path.

When Equity Falls

Equity can shrink too. If property prices drop and your mortgage balance is high relative to the value, you could end up with very little equity — or in the worst case, negative equity, where you owe more than the home is worth. This is most common when you've bought recently with a small deposit and the market dips. It matters most if you need to sell or remortgage while values are down.

Does my deposit count as equity?

Yes. The deposit you put in was your initial equity. It grows from there as you repay the loan and if the value rises.

Is equity the same as the profit I'd make selling?

Close, but not identical. Your equity is value minus mortgage. Your actual proceeds after a sale also subtract estate agent fees, legal costs and any early repayment charges.

How often should I check my equity?

Reviewing it before each remortgage is sensible, and any time local prices have moved noticeably. It helps you spot when you've crossed into a better loan-to-value band.

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Start by pinning down your home's value with the free house value calculator, then subtract your mortgage balance to see exactly how much equity you're sitting on.