Home equity is the portion of your property that you truly own — it’s the difference between your home’s market value and the balance you still owe on your mortgage.
As you pay down your loan or your property value increases, your equity grows. For example, if your home is worth $350,000 and you owe $250,000, you have $100,000 in equity.
How can you use home equity?
- 💸 Cash-out refinance: Refinance your mortgage for more than you owe and take the difference in cash.
- 🏗️ Home equity loan/line of credit (HELOC): Tap into your equity to finance renovations, pay off debt, or fund big expenses.
- 📈 Sell and downsize: Many sellers use equity to purchase a smaller property outright, avoiding another mortgage.
Using equity wisely can strengthen your financial position — but over-leveraging can lead to risk. Always weigh the costs and long-term impact before borrowing against your home.
