Start with the sale side: home value minus any remaining mortgage gives gross equity, then subtract seller closing costs, typically 4 to 6 percent, covering commission, legal fees and adjustments together, to see what actually lands in the account at possession.
The next home is the other half of the math. A smaller house, a condo or a rental all carry different price tags and different ongoing costs, so the real number freed up is the gap between what the current home sells for and what the next place costs, not the sale price alone.
Joel Dyck runs this full calculation with clients starting from a hand-reviewed valuation of the current home. Get your hand-reviewed valuation from Joel Dyck.