Real Estate Term
Equity
The difference between a property's market value and the amount owed on the mortgage.
What is Equity?
Equity is the share of your property that you actually own — the difference between its current market value and the balance still owed on your mortgage. It grows two ways: as you pay down the mortgage principal and as the home appreciates in value. Homeowners can tap equity through refinancing or a home equity line of credit to fund renovations, another purchase, or other goals.
Frequently asked questions
Related terms
AppreciationAn increase in property value over time due to market conditions or improvements.Down PaymentThe portion of the purchase price paid upfront by the buyer, typically expressed as a percentage.AmortizationThe process of paying off a loan over time through regular payments that cover both principal and interest.RefinancingReplacing an existing mortgage with a new one, often to get better terms or access equity.MortgageA loan used to purchase real estate, with the property serving as collateral.
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