What is Equity?
Equity is the portion of a home’s value the owner actually owns — the difference between what the property is worth and what is still owed on it. Equity grows as the loan is paid down and as the home’s value rises. Owners can tap it through a sale, refinance, or home equity loan or line of credit.
Example: A home worth $700,000 with a $400,000 mortgage balance gives the owner $300,000 in equity.