How Much Equity Do You Really Need to Move?

If you’re thinking about selling your current home and buying another, equity is the key factor. But how much do you actually need?

The answer depends on your goals, market conditions, and how much cash you want available after the sale.

💰 1. Understand What Equity Really Means

Equity is:

Current market value – Remaining mortgage balance = Your equity

Example:

• Home value: 500,000

• Mortgage balance: 350,000

• Equity: 150,000

But that does not mean you walk away with the full 150,000.

📉 2. Subtract Selling Costs

Before calculating what you can use toward your next home, factor in:

• Agent commissions

• Closing costs

• Repairs or staging

• Possible buyer concessions

Selling costs typically range between 6%–10% of the sale price.

Using the earlier example:

• 500,000 sale price

• 8% selling costs (40,000)

• Remaining after mortgage payoff: 110,000

Your usable equity becomes much lower.

🏦 3. How Much Do You Need for the Next Home?

Consider:

• Down payment (often 5%–20%)

• Closing costs on the new purchase

• Moving expenses

• Emergency savings cushion

If your next home is more expensive, you may need additional funds beyond your equity.

📊 4. Ideal Equity Targets

While there is no universal number, here are general guidelines:

✔ 20%+ Equity

• Strong position

• Covers selling costs

• Likely provides down payment

• May eliminate PMI on next purchase

✔ 10–20% Equity

• Possible to move

• May need careful budgeting

• Might carry PMI on next loan

❗ Under 10% Equity

• Limited flexibility

• Selling costs may significantly reduce proceeds

• May require additional savings

🔄 5. Bridge Options If Equity Is Tight

If you are short on equity, you may consider:

• Bridge loans

• Home equity lines of credit

• Selling first, then buying

• Negotiating rent-back agreements

Each option has risks and costs that need evaluation.

🧠 6. The Bigger Question: Why Are You Moving?

Sometimes equity is only part of the equation.

Ask:

• Are you upsizing or downsizing?

• Relocating for work?

• Reducing monthly expenses?

• Investing in a stronger market?

The purpose of the move shapes how much equity you truly need.

🎯 Final Thoughts

There is no magic number, but many homeowners aim for at least 15%–20% equity before moving to comfortably cover selling costs and fund their next purchase.

The smartest move is running the numbers before listing your home.

If you share:

• Estimated home value

• Remaining mortgage balance

• Target purchase price