Looking to Tap into Your Home Equity in Ontario?

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We help homeowners get the lowest rates for home equity loans, home equity lines of credit, refinancing, and other mortgage products.

To get approved for a home equity loan or HELOC, click here to schedule a call with our team.

Your home is more than just a place to live—it’s also one of the biggest investments you’ll ever make. Over time, as property values rise and you pay down your mortgage, you build something called home equity.

But what exactly is home equity, and how do you figure out how much you have?

Let’s break it down step by step.

What Is Home Equity?

Home equity is the portion of your home that you truly own. It’s the difference between your home’s current market value and the amount you still owe on your mortgage.

Think of it like this:

If your home is worth $600,000, and you still owe $200,000, then you have $400,000 in home equity.

Your equity grows in two ways:

As you pay down your mortgage over time.

When the value of your home goes up.

This is why real estate is such a powerful financial tool—it’s one of the few assets that can grow in value while you live in it and gradually pay it off.

Why Knowing Your Home Equity Matters

Understanding your home equity helps you make smart financial decisions. Here's why it’s important:

It helps you know how much you could borrow through a home equity loan or line of credit.

It gives you a clearer picture of your net worth.

It can help you decide whether to refinance, sell, or stay in your current home.

It plays a big role in qualifying for a second mortgage, reverse mortgage, or debt consolidation loan.

Whether you're planning for retirement, paying off debt, or funding home upgrades, knowing your home equity is the first step.

Step 1: Find Out the Current Market Value

The first part of calculating your home equity is figuring out what your home is actually worth today—not what you paid for it years ago.

Here are a few ways to estimate your home’s current value:

Talk to a Realtor or Mortgage Broker

Real estate agents and mortgage brokers often have access to the MLS (Multiple Listing Service), which gives them real-time data on home sales near you. They can give you a more accurate opinion of your home's value.

Online Home Value Estimators

You can use tools like HouseSigma, Zolo, or Realtor.ca to get an estimated market value based on recent sales in your area.

Keep in mind: these tools give a ballpark figure, but they’re not always 100% accurate.

Get a Professional Appraisal

If you want the most accurate number—especially if you're applying for a loan—an appraisal from a certified home appraiser is your best bet. This is usually arranged by the broker to make sure the appraiser is approved by the lenders.

Step 2: Check Your Mortgage Balance

Next, find out exactly how much you still owe on your mortgage.

You can:

Log into your online mortgage account

Check your most recent mortgage statement

Call your lender or mortgage broker

Make sure you look at the total amount owing, not just the monthly payment. This number includes your remaining principal but may not include interest charges due on your next payment.

Step 3: Calculate How Much Equity is in Your Home

Now that you know your home’s current market value and your mortgage balance, here’s the simple formula to calculate your home equity:

Home Equity = Current Home Value – Mortgage Balance

Current home value: $700,000

Remaining mortgage: $250,000

Your home equity: $700,000 – $250,000 = $450,000

That’s how much of your home you truly own. And it’s also the amount you could potentially access if you’re looking to borrow against your home.

Step 4: Calculate Your Loan-to-Value Ratio (LTV)

Lenders don’t just look at how much equity you have. They calculate something called your Loan-to-Value ratio, or LTV, to see how much of your home’s value is already tied up in debt.

Here’s how to calculate the loan-to-value ratio:

LTV = (Mortgage Balance ÷ Current Home Value) × 100

Using our earlier example:

Mortgage balance = $250,000

Home value = $700,000

LTV = ($250,000 ÷ $700,000) × 100 = 35.7%

This means 35.7% of your home’s value is mortgaged, and you own about 64.3% outright.

Lenders typically allow you to borrow up to 80% of your home’s value through refinancing or a home equity line of credit (HELOC).

Step 5: How Much Can You Borrow?

Now that you know how much equity you have and what your LTV is, you can figure out how much of that equity is accessible.

Most lenders in Canada will let you borrow up to 80% of your home’s value, minus what you still owe on your mortgage.

Available Equity for Borrowing = (Home Value × 80%) – Mortgage Balance

Example:

Home value = $700,000

80% of home value = $560,000

Mortgage balance = $250,000

Maximum borrowing amount = $560,000 – $250,000 = $310,000

That’s how much equity you may be able to access through a HELOC, second mortgage, or refinance—depending on your credit, income, and the lender’s requirements.

Equity vs. Usable Equity: What’s the Difference?

It’s important to know that just because you have, say, $400,000 in equity doesn’t mean you can use all of it.

The usable equity is what lenders are willing to let you borrow, and it's typically capped at 80% of your home’s value (including your current mortgage).

So if you have $400,000 in total equity, but already have a mortgage worth 60% of your home’s value, your usable equity is only about 20%.

What Factors Affect How Much Equity You Can Use?

Several things influence how much of your home equity you can actually borrow:

Your credit score – Better credit means more borrowing options.

Your income – Lenders need to know you can afford the payments.

Your home’s location and type – Urban homes often appraise higher and qualify for more.

Your current mortgage terms – Some mortgages limit how much you can borrow or who you can borrow from.

How Can You Use Your Home Equity?

Once you know how much equity you have, you can use it for a variety of purposes:

Consolidate high-interest debt (like credit cards or personal loans)

Renovate your home to increase its value

Help family members with living expenses

Invest in other real estate or retirement planning

Lenders offer different products to help you access equity, such as:

Home Equity Line of Credit (HELOC) – Flexible, revolving credit you can use as needed.

Second mortgage or home equity loan – A lump sum loan secured against your home.

Mortgage refinance – Replace your current mortgage with a larger one and receive the difference in cash.

Mistakes to Avoid With Using Your Home Equity

Here are a few things to watch out for when calculating or using your home equity:

Overestimating your home value – Use reliable data or get a professional appraisal.

Borrowing too much – Stay within what you can afford, even if the bank approves a large amount.

Using equity for unnecessary spending – Treat home equity as a tool for improving your financial future, not funding a lifestyle.

How to Calculate Your Home Equity

Your home equity is a powerful financial asset—but only if you understand how to calculate it and use it wisely.

Find your current home value (use an estimator, talk to a broker, or get an appraisal).

Subtract your remaining mortgage balance to get your total equity.

Calculate your loan-to-value (LTV) to see how leveraged your home is.

Figure out how much you can borrow, usually up to 80% of your home’s value.

Use your equity strategically.

If you’re unsure where to start or want help calculating your numbers, speak with a mortgage broker. They can review your situation, provide accurate calculations, and show you real options for tapping into your equity responsibly.

Need help calculating your home equity or exploring your borrowing options?

Reach out to an experienced mortgage broker—they’ll guide you through your numbers, help you compare lenders, and build a plan that works for your goals.