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My Home Value Has Gone Up. Now What?

Friday April 29, 2022

Selling your Home

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Equity is a word being tossed around a lot right now, especially with the way home prices have surged over the last few years. But what is equity and how can you, the homeowner, take advantage of what you’ve earned over the past few years? By using amortization schedule tools we can discover just how much equity YOU have in your home. Even if you aren’t thinking about selling in the near future, this is an important tool to have.

According to the  Canadian Association of Accredited Mortgage Professionals, the average homeowner stays in their home for about 7 years or moves between 4-5 times in their lifetime. Homeowners who have 7+ years of mortgage payoff, will be shocked to learn about how much equity they have built.

Let’s show you how much you have paid down on your mortgage over the last 7 years using an amortization based on a mortgage amount of $550,000 with a 25-year payoff term.

With an amortization schedule, you can see exactly how much of your payment is going to the interest for the loan and how much is going towards paying off the principal. For example…

  • After 1 year, you will have paid down your principal by around sixteen thousand dollars ($16,508.41)
  • After 3 years, you will have paid it down by just over fifty thousand dollars. ($50,781.54)
  • After 5 years, you will have paid it down by eighty-six thousand dollars. ($86,800.74)
  • This means that after 7 years you have paid off almost one-hundred & twenty-five thousand dollars of your mortgage. ($124,654.94)

BUT that isn’t the entire story.

It doesn’t consider the appreciation that may have occurred in the last 7 years. Last year alone the home prices in our area went up around 23%. That would make the home worth $126,000 more than the owner paid for it. If you add the $126K to the $124K from your loan payoff you get $250,654.94 equity in just 7 years. That is why homeownership is such a powerful tool when building wealth and why we believe in buying and holding real estate.

Using an online amortization schedule tool will give you an idea of what you have paid off on your mortgage but — to get the entire picture of the equity in your home you need to know what your home is worth in today’s market. From there, you can decide what you want to do with that equity – whether it’s purchasing an investment property, downsizing to retire early or finally getting that cottage up north.

To get an accurate valuation of your home give us a call at 905 332 9223 or go to woolcott.ca to receive a no-obligation home evaluation.

 

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