Financial
Equity
The difference between your home's current market value and the amount you still owe on your mortgage. If your home is worth $400,000 and you owe $280,000, you have $120,000 in equity. Equity builds as you make payments and as your home appreciates in value. You can tap into equity through a home equity loan, HELOC, or cash-out refinance.
Why It Matters
Equity directly affects how much you pay for your home and how you build wealth through homeownership. Understanding the financial mechanics of your mortgage helps you make choices that save money over the long term.
Use mortgage calculators to see how equity impacts your specific numbers. Even small differences in financial terms can add up to tens of thousands of dollars over the life of a 30-year mortgage.