Enter the price of the sale of the home and the current market value of the home into the calculator to determine the gift of equity.

## Gift of Equity Formula

The following formula is used to calculate a gift of equity.

GOE = MV – SP

- Where GOE is the gift of equity
- MV is the market value of the home
- SP is the sale price of the home

## Gift of Equity Definition

A gift of equity is defined as the difference between the sale price and market value of a home that is sold to a family member or close relationship at a discount.

## Gift of Equity Example

How to calculate a gift of equity?

**First, determine the current market value.**Through a calculator or appraiser, determine the current fair market value of the home.

**Next, determine the sale price.**Determine the expected or wanted sale price of the home.

**Finally, calculate the gift of equity.**Calculate the gift of equity using the formula above.

## FAQ

**Can a gift of equity be used toward a down payment?**

Yes, most lenders let the gift of equity be used towards the down payment of the mortgage.