RBC Home Equity Calculator 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 the difference between your home's current market value and the outstanding balance on your mortgage. For RBC customers in Canada, understanding home equity is crucial for financial planning and borrowing decisions.

2. How Does the Calculator Work?

The calculator uses the simple home equity formula:

\[ E = V - B \]

Where:

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

Explanation: This formula calculates how much of your home you actually own after accounting for your mortgage debt. Positive equity means you own more than you owe, while negative equity (underwater mortgage) means you owe more than your home is worth.

3. Importance of Home Equity Calculation

Details: Knowing your home equity is essential for RBC mortgage refinancing, home equity lines of credit (HELOCs), selling decisions, and overall net worth assessment. It helps Canadian homeowners make informed financial choices.

4. Using the Calculator

Tips: Enter your home's current market value and remaining mortgage balance in Canadian dollars. Use recent property assessments or market comparisons for accurate home valuation. Include all mortgage balances if you have multiple loans on the property.

5. Frequently Asked Questions (FAQ)

Q1: What is a good amount of home equity?
A: Generally, 20% or more equity is considered healthy. This avoids mortgage insurance requirements and provides borrowing flexibility for RBC customers.

Q2: How can I increase my home equity?
A: Through mortgage payments (reducing balance), home value appreciation (market growth), and home improvements that increase property value.

Q3: Can I borrow against my home equity with RBC?
A: Yes, RBC offers home equity loans and HELOCs typically up to 80% of your home's value minus your mortgage balance, depending on creditworthiness.

Q4: How often should I calculate my home equity?
A: Annually or when considering major financial decisions. Property values can change, and regular mortgage payments increase equity over time.

Q5: What if my home equity is negative?
A: This means you're "underwater" on your mortgage. Consult with RBC financial advisors about options like mortgage restructuring or payment plans.