Home equity guide
Home equity explained
Understand home equity, gross equity and usable equity when selling a UK property and planning your next move.
Home equity is the part of your property value that is yours after the mortgage is repaid.
A simple estimate is: expected sale price − mortgage balance − selling costs = usable equity released.
A simple estimate is: expected sale price − mortgage balance − selling costs = usable equity released.
Example
Expected sale price£280,000
Mortgage remaining£140,000
If estate-agent and legal selling costs total £4,260, the estimated usable equity would be about £135,740.
Why usable equity is lower than headline equity
People often subtract only the mortgage from the property value. For a moving budget, that can be too optimistic because selling costs reduce the amount available for your next deposit and purchase costs.
- Estate-agent fees
- Selling conveyancing fees
- Mortgage redemption or early repayment charges
- Other secured borrowing that must be cleared
Your whole move
Bring the numbers together.
Take what you’ve learned here back to MoveBudget and see what you’ll actually need in the bank.
Back to MoveBudget →