Equity drives a huge part of the BrokerPlus conversation - refinance candidacy, debt consolidation analysis, equity reports, the works. Here's exactly how the number is computed.
The Formula
Equity = Estimated Property Value - Current Mortgage Balance
Plus a derived LTV (Loan-to-Value) percentage:
LTV = Current Mortgage Balance / Estimated Property Value
Current Mortgage Balance here means only the amortizing mortgage - the fixed, variable, or ARM portions plus non-revolving secured debts like a second mortgage. A registered line of credit (a standalone HELOC, a personal line of credit, or the line-of-credit portion of a readvanceable product) is not subtracted from the property value. See below for why.
Where The Property Value Comes From
We blend valuations from several AVMs (Automated Valuation Models). Different AVMs use different methods and data - by combining them, we get a more stable estimate than any single source would give.
The result is shown as a single value on the equity page. We refresh it periodically without you having to ask.
If a client enters their own value on an equity report, it does not change this number. We keep it separately as their perceived value and show you the discrepancy, so you can roll it in or leave it. See Client Perceived Value.
Where The Mortgage Balance Comes From
- From your import (Filogix / Finmo / Velocity / mapped CSV).
- From manual entry when you add a client via the Add Client button.
- Updated when a client interacts with an equity report and provides a new balance (which also triggers a notification - see Notifications You'll Receive).
If a mortgage is split into priced segments (a readvanceable product like Scotia STEP or Manulife One, with a fixed portion, variable portion, and line of credit), the amortizing portions still add up and get subtracted from the property value. The line-of-credit portion does not. The same holds for a standalone HELOC or personal line of credit: it is left out of the equity and LTV math.
We exclude the line of credit because its registered amount is usually the limit, not what the client has actually borrowed. Subtracting the full amount would assume the client had maxed it out, understating their equity and overstating their LTV. Leaving it out keeps the headline honest. The line of credit is still listed in the itemized mortgage breakdown so you can see it - it just no longer drags the equity and LTV numbers down. (HELOC borrowing-room and reverse-mortgage scenarios still use the full debt.)
Manual Valuation Override
AVMs are estimates. If you know the property better than the AVM (an unusual property, a recent appraisal, local market knowledge), override it.
- Open the client's Equity tab.
- Click the pencil icon next to the property value.
- Enter your value.
- Save.
The override sticks until you clear it. To revert, click the pencil again and choose Clear override - we'll go back to the AVM blend.
The fact that an override is in place is visible on the equity page so you don't forget.
Refresh Cadence
AVMs refresh automatically. If you've manually overridden the value, your override stays in place - refreshes don't overwrite manual entries.
What To Do Next
- See the full equity page: What The Equity Page Shows.
- Capture other properties the client owns: Adding Additional Properties.
- Equity not loading? Equity Isn't Loading For A Property.