# Gift of Equity Calculator

URL: https://speedycalculator.com/calculators/finance/gift-of-equity/
Last updated: 2026-10-25

> The gift of equity calculator works out the equity a seller (usually a family member) gives a buyer by selling a home below market value, and how much of the required down payment it covers.

## Inputs

- Market (appraised) value
- Sales price
- Required down payment (%)

## Results

- Gift of equity
- Gift as a share of market value
- Down payment required (on market value)
- Extra cash needed for the down payment
- Loan amount

## Formula

```
Gift of equity = market value − sale price
Down payment covered = gift ÷ required down payment
```

## Explanation

Lenders let the gift of equity count as all or part of the down payment. Gifts above the annual gift-tax exclusion ($19,000 per recipient in 2026) require the giver to file Form 709, though tax is rarely owed because of the lifetime exemption.

### How to use the Gift of Equity Calculator

- **Market (appraised) value**
- **Sales price**
- **Required down payment**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the home's appraised market value, the agreed sale price and the down payment percentage the lender requires.

### Tips

- Get a written loan estimate and compare the APR, not just the interest rate.
- Include property tax, insurance, HOA fees and maintenance in your monthly budget.
- A larger down payment lowers the payment and can remove mortgage insurance.
- Rates change daily – use a current quote for the most accurate result.

### Common mistakes to avoid

- Looking only at the monthly payment instead of the total cost of the loan.
- Forgetting closing costs and fees.
- Assuming home prices always rise.

### Inputs explained

FieldWhat to enterMarket (appraised) valueAmount in your currencySales priceAmount in your currencyRequired down paymentIn %

### What each result means

- **Gift of equity** = [Market (appraised) value] - [Sales price]
- **Gift as a share of market value** = [Gift of equity]÷[Market (appraised) value]×100
- **Down payment required (on market value)** = [Market (appraised) value]×[Required down payment]÷100
- **Extra cash needed for the down payment** = max([Market (appraised) value]×[Required down payment]÷100 - [Gift of equity], 0)
- **Loan amount** = [Sales price] - max([Market (appraised) value]×[Required down payment]÷100 - [Gift of equity], 0)

### Example values

How the main result changes when **Market** changes and everything else stays at the example values above:

Market (appraised) valueGift of equity200,000-140,000300,000-40,000400,00060,000500,000160,000600,000260,000800,000460,000

## Worked example

Inputs — Market (appraised) value: $400,000; Sales price: $340,000; Required down payment: 20 %.

Results — **Gift of equity = $60,000.00**; Gift as a share of market value = 15 %; Down payment required (on market value) = $80,000.00; Extra cash needed for the down payment = $20,000.00; Loan amount = $320,000.00.

## FAQ

**What is a gift of equity?**
Selling a home to a relative below market value; the difference is a gift.

**Can a gift of equity be my down payment?**
Yes – most loan programs accept it.

**Is a gift of equity taxable?**
The giver may need to file a gift tax return if it exceeds the annual exclusion.

**What formula does the Gift of Equity Calculator use?**
Gift of equity = market value − sale price.