Rates & Loans

Equity

The portion of an asset you truly own — its value minus any debt secured against it.

What does equity mean?

Home equity is your property’s value minus your mortgage balance. It grows as you pay down the loan and as the property appreciates, and it can be borrowed against with a home equity loan or HELOC.

Put it to use

Home Equity Line of Credit Calculator How big of a home equity line of credit can you receive? Use this calculator to find out! Reverse Mortgage Calculator This calculator is specifically designed to show you how the outstanding balance of a reverse mortgage can rapidly grow over a period of time.

Related terms

Loan-to-Value (LTV)Net Worth

Equity — frequently asked

How do I calculate my home equity?

Subtract your remaining mortgage balance from your home’s current market value. A $400,000 home with a $250,000 balance has $150,000 of equity. Rising home values and principal payments both increase it.

How can I build home equity faster?

Make extra principal payments, choose a shorter loan term, avoid cash-out refinancing, and maintain or improve the property. Home-price appreciation adds equity too, but the part you control is paying the balance down.

All glossary terms