Home Equity

The portion of your home's value that you actually own, free of any mortgage.

Equity is your home's current market value minus whatever you still owe on it. It grows two ways: you pay down the mortgage principal over time, and the property's value can rise independently of anything you do. It's the number that matters if you sell, refinance, or borrow against the home.

Worked Example

A home worth $400,000 with $250,000 left on the mortgage has $150,000 in equity. Pay down another $20,000 of principal, or have the home appraise $20,000 higher, and equity rises to $170,000 either way.

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