Understanding Equity

Watch an animation to see how it works.

Equity is the amount of money you have invested into owning your home. If you are still in the process of paying off your mortgage, the equity is worth the market value, or current price, of the property minus anything you still have to pay.

A home is one of the few things you can buy that becomes more valuable with time, known as appreciation. Usually a purchase loses value over time, like a car or electronics, also called depreciation.

How To Use Equity

Taking out money on your house (or the equity you’ve built up) is another kind of loan. Home equity loans have their own interest rates, just like mortgage loans. There is no single loan that works for everyone, but our Mortgage Coach can help find the one for you.