Home Equity Calculator TD Canada

Home Equity Formula:

\[ E = V - B \]

Home Equity (E):

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1. What is Home Equity?

Home equity represents the portion of your property that you truly own. It's calculated as the difference between your home's current market value and the outstanding balance on your mortgage. For TD Canada customers, understanding home equity is essential for financial planning and accessing home equity products.

2. How Does the Calculator Work?

The calculator uses the home equity formula:

\[ E = V - B \]

Where:

\( E \) — Home equity (CAD)
\( V \) — Current home value (CAD)
\( B \) — Outstanding mortgage balance (CAD)

Explanation: This simple subtraction gives you the net value you've built up in your property after accounting for your mortgage debt.

3. Importance of Home Equity Calculation

Details: Knowing your home equity helps TD Canada customers make informed decisions about refinancing, home equity lines of credit (HELOCs), selling their property, or planning for retirement. It's a key indicator of your financial health and borrowing capacity.

4. Using the Calculator

Tips: Enter your home's current market value and your remaining mortgage balance in Canadian dollars. Both values must be positive numbers. Use recent property assessments or market comparisons for accurate home valuation.

5. Frequently Asked Questions (FAQ)

Q1: What is considered good home equity?
A: Generally, having 20% or more equity is considered healthy. This typically allows you to avoid mortgage insurance and access better loan terms with TD Canada.

Q2: How can I increase my home equity?
A: You can build equity through mortgage payments, home value appreciation, and property improvements. TD Canada offers various products to help homeowners build and leverage equity.

Q3: Can I have negative home equity?
A: Yes, if your mortgage balance exceeds your home's current value (often called being "underwater"). This situation requires careful financial planning with TD Canada advisors.

Q4: How often should I calculate my home equity?
A: It's recommended to review your home equity annually or when considering major financial decisions. TD Canada customers can access updated mortgage balance information through online banking.

Q5: What TD Canada products use home equity?
A: TD Canada offers home equity lines of credit (HELOCs), mortgage refinancing, and reverse mortgages that utilize your home equity as collateral.