Home Equity & LTV Calculator
Work out your current home equity, loan-to-value (LTV), how much of your equity came from paying down your mortgage versus house price growth, your borrowing capacity at different LTV levels, and a 5-year equity projection.
Original Purchase Details (optional)
Add these to see how much of your equity has come from paying down the mortgage versus house price growth. Leave as 0 to skip this breakdown.
Where Your Equity Came From
Borrowing Capacity by LTV Band
What Would It Take to Reach a Better LTV Band?
Two routes to each target: pay the mortgage down by the amount shown (with the property value held constant), or reach that LTV purely through the property’s value rising to the figure shown (with the balance held constant). In reality it’s usually a mix of both.
5-Year Equity Projection
Illustrative only. Assumes property value grows at the rate selected above, compounding annually; your mortgage rate, term and any overpayment stay unchanged for 5 years; and (for repayment mortgages) standard capital repayment continues on schedule. Excludes remortgage fees, selling costs, home improvements and changes to your rate when any fixed deal ends.
Home Equity & LTV Calculator UK 2026/27
Our Home Equity & LTV Calculator helps UK homeowners work out how much of their property they actually own. Enter your current property value and outstanding mortgage balance to see your equity, your loan-to-value (LTV) ratio, how much of your equity has come from paying down the mortgage versus house price growth, what you could realistically borrow at different LTV levels, and a 5-year projection of how your equity is likely to grow.
What Is Home Equity?
Home equity is the portion of your property that you own outright: your current property value minus whatever you still owe on your mortgage. If your home is worth £320,000 and you owe £180,000, your equity is £140,000, or roughly 44% of the property’s value. Equity isn’t static — it grows (or shrinks) every time your property’s value changes and every time your mortgage balance changes.
What Is Loan-to-Value (LTV)?
LTV is the flip side of equity: it’s your mortgage balance expressed as a percentage of your property’s value. A £180,000 mortgage on a £320,000 home is 56.25% LTV. LTV matters because UK mortgage lenders price almost entirely around it — the lower your LTV, the less risk the lender is taking on, and the better the rate you’re typically offered. Moving from, say, 85% LTV down to 75% LTV by paying down your mortgage or through house price growth can meaningfully cut your rate at your next remortgage.
| Metric | Formula | What It Shows |
|---|---|---|
| Equity | Property value − mortgage balance | What you actually own, in £ |
| Equity % | Equity ÷ property value × 100 | What you own, as a share of the property |
| LTV | Mortgage balance ÷ property value × 100 | What the lender is exposed to — drives your mortgage rate |
The Two Engines of Home Equity Growth
Your equity grows through two completely separate mechanisms, and it’s worth knowing which one is doing the work. Mortgage paydown is the capital portion of your monthly repayment reducing your balance — a guaranteed, contractual increase in equity that happens regardless of the housing market (though it doesn’t happen at all on an interest-only mortgage unless you overpay). House price appreciation is your property simply becoming worth more, which is entirely dependent on the local market and isn’t guaranteed in either direction. Early in a repayment mortgage, most of each payment goes on interest rather than capital, so appreciation typically does more of the work; later in the term, paydown accelerates. The calculator above splits out both effects so you can see which one is actually driving your numbers.
Home Equity Example
Someone bought a property for £240,000 with a £40,000 deposit and a £200,000 mortgage. Six years on, they’ve paid the balance down to £180,000 and the property is now valued at £320,000. Their equity is £320,000 − £180,000 = £140,000, made up of their original £40,000 deposit, £20,000 of mortgage capital repaid, and £80,000 of house price appreciation. Their LTV has fallen from 83% at purchase to 56% today, likely unlocking meaningfully better mortgage rates at their next remortgage. Plug your own numbers into the calculator above for the full breakdown.
How to Use the Home Equity & LTV Calculator
- Enter your current property value based on a recent valuation, comparable local sales, or an online estimate — be realistic rather than optimistic.
- Enter your current outstanding mortgage balance, taken from your latest mortgage statement.
- Choose your mortgage type (repayment or interest-only), your interest rate and remaining term, so the projection can model how your balance changes.
- Add a monthly overpayment if you make one, to see its effect on your balance and future equity.
- Optionally add your original purchase price and original mortgage amount to unlock the equity growth breakdown, splitting your equity into deposit, capital repaid, and appreciation.
- Adjust the growth assumption to match your view of the local market, then review the borrowing capacity table and 5-year projection.
Typical UK Loan-to-Value Bands and Rates
UK mortgage lenders price in LTV bands, with the sharpest rates reserved for borrowers with the most equity. As of August 2026, the Bank of England base rate sits at 3.75% (held on 30 July 2026), average two-year fixed rates are around 5.5–5.6%, and the best deals at 60% LTV or below are closer to 4.5%. Standard variable rates — what you fall onto once a fixed deal ends — average around 7%, which is why remortgaging on time matters. The band-by-band ranges below are illustrative estimates rather than a live feed, since individual mortgage rates move far more often than this page is updated.
| LTV Band | Illustrative Rate Range* | Typical Borrower |
|---|---|---|
| Up to 60% | ~4.0% – 4.6% | Long-term owners, large deposits, later-life remortgagers |
| 61% – 75% | ~4.4% – 5.1% | Mainstream home movers and remortgage customers |
| 76% – 85% | ~4.8% – 5.5% | Buyers with a moderate deposit |
| 86% – 90% | ~5.2% – 5.9% | 10% deposit buyers |
| 91% – 95% | ~5.6% – 6.4% | 5% deposit / first-time buyer schemes |
*Illustrative estimates last updated August 2026 — not live rates and not a quote. Individual lender pricing, product fees and your personal circumstances (income, credit history, property type) will move the rate you’re actually offered above or below these ranges; always compare current deals before acting.
What Can You Do With Home Equity?
- Remortgage to a better rate: if your LTV has dropped since your last deal (through paydown, appreciation, or both), you may qualify for a materially cheaper rate band.
- Release equity via a further advance or remortgage: borrowing more against the property, commonly for home improvements, debt consolidation or a deposit on another property — always weigh this against increasing what you owe.
- Downsize or move with a larger deposit: equity from your current home becomes the deposit on your next one, which can materially improve the LTV band — and rate — on a new mortgage.
- Later-life lending or equity release: older homeowners with substantial equity sometimes use lifetime mortgages or home reversion plans to release cash; this is a distinct, specialist product area with its own rules and is not covered by this calculator.
Factors That Affect Your Equity
- Local house price movements: the single biggest swing factor, and the one you don’t control — UK-wide consensus forecasts for 2026 cluster around 1–3% annual growth, but local markets vary widely.
- Mortgage type: repayment mortgages build equity automatically through scheduled capital repayment; interest-only mortgages don’t reduce your balance at all unless you make separate overpayments.
- Overpayments: even modest, regular overpayments compound meaningfully over several years, both reducing your balance and improving your LTV band faster than scheduled repayments alone.
- Remortgaging and further borrowing: taking cash out when you remortgage increases your balance and can reset or reverse your equity growth — factor this in if you’ve borrowed more since you first bought.
- Home improvements vs. general market growth: not all appreciation is market-driven; renovations can add value independently of the wider market, though not always pound-for-pound against what they cost.
Frequently Asked Questions
How do I calculate my home equity?
Subtract your outstanding mortgage balance from your property’s current estimated value. If your home is worth £320,000 and you owe £180,000, your equity is £140,000. Use the calculator above to also see this as a percentage and alongside your LTV.
What is a good LTV for remortgaging?
75% LTV or below is generally where mainstream, competitively priced remortgage deals start. Getting to 60% LTV typically unlocks the very best rates on the market. Above 85% LTV, product choice narrows and rates are noticeably higher.
Does paying off my mortgage or house price growth build equity faster?
It depends on your mortgage stage and local market. Early in a repayment mortgage, most of each payment covers interest rather than capital, so house price growth usually contributes more to equity in the short term. Later in the mortgage term, capital repayment accelerates and contributes more. On an interest-only mortgage, none of your monthly payment reduces the balance, so all equity growth comes from price appreciation unless you overpay.
How much equity do I need to remortgage?
There’s no fixed minimum, but most remortgage products require at least 5–10% equity (i.e. no more than 90–95% LTV). The better-priced deals generally require 25%+ equity (75% LTV or below).
Can I release equity from my home without moving?
Yes, typically through a further advance from your existing lender or by remortgaging to a larger loan at your current property’s new, higher value. This increases your mortgage balance and monthly payments, so it should be weighed carefully against the cost of borrowing elsewhere. Later-life equity release (lifetime mortgages) is a separate, specialist product for older homeowners.
What is negative equity?
Negative equity means your mortgage balance is higher than your property’s current value — your equity is a negative number. It usually results from a falling local market shortly after buying with a small deposit. It doesn’t affect your ability to keep paying your existing mortgage, but it typically makes remortgaging or selling without covering the shortfall difficult until values recover or the balance is paid down.
Does an interest-only mortgage build equity?
Not through the mortgage payment itself — the balance stays the same because you’re only paying interest each month. Any equity growth on an interest-only mortgage comes entirely from house price appreciation, or from separate voluntary overpayments if your lender permits them.
How accurate is the 5-year equity projection?
It’s illustrative only. It assumes your chosen annual property growth rate compounds steadily, and that your mortgage rate, term and any overpayment stay unchanged for the full 5 years. Real house prices don’t move in a straight line, and your mortgage rate will likely change whenever your current fixed deal ends, so treat the projection as a scenario rather than a forecast.
What’s the difference between equity and profit?
Equity is what you’d theoretically be left with if you sold today and repaid the mortgage — it isn’t profit. It doesn’t account for selling costs (estate agent and legal fees), the cost of buying your next property (including Stamp Duty), or what you originally paid in as a deposit and purchase costs when you bought.