What is “Home Equity?”

Home equity refers to the money you have paid toward the value of your home. The more money you pay toward your mortgage balance, the more equity you accumulate in your home. For example, if your home is appraised at $300,000, and your mortgage has a balance of $200,000, your home’s equity equals $100,000. Other factors can affect how equity is calculated, including whether you have any liens or a second mortgage.