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The difference between an asset's value and what you owe on it. Home equity equals market value minus mortgage balance. In investing, equity means ownership stake (stocks).
If your home is worth $400,000 and you owe $250,000, you have $150,000 in equity (37.5% of the home's value).
Home equity can be tapped through HELOCs or cash-out refinancing, and builds wealth as you pay down your mortgage and your home appreciates.