Katie and I maintain two numbers for our net-worth.  Net-worth for wealth building (which excludes the home we live in) and total net-worth (which includes it).  The reason for this is that even though your home has a value it isn’t going to bring you any money in retirement unless you rent it out.

If you use the spreadsheet Katie has created here then it has a separate section that captures the equity in your home. You put in the amount the home is worth and the amount you have left on your mortgage and the formula auto calculates the equity in your home and includes it in total net-worth.  If your house is worth £300,000 and you owe £100,000 on the mortgage then the equity or value you have within the house is £200,000.

The spreadsheet automatically adds the £200,000 (difference between value and mortgage) to the total net-worth.  Neither show up in the net-worth for wealth-building.

There is an argument to be made that if you are underwater on your house i.e. you owe more than it is worth so you have a negative value that this should show up on your overall net-worth as you will have to pay this off.  But this is a rare case.

For simplicity neither the mortgage or the value of the house show up in the net-worth for wealth building.