What is the definition of home equity?

Home equity represents the difference between your property’s market value and the remaining balance on your mortgage.

Essentially, it’s the portion of your home that you fully own. You can grow your equity by consistently paying down your mortgage or making upgrades that enhance your home’s value.

Home equity can be leveraged as a financial resource to cover expenses like debt consolidation or educational costs. This can be done through a home equity loan or a home equity line of credit (HELOC).