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. This calculator can also calculate the market value or sale price if given the other variables.

## 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

To calculate gift of equity, subtract the market value of the home from 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.