August 26, 2026
There are plenty of benefits to home ownership, including the satisfaction of personalizing your home and becoming part of a neighborhood. There are some big financial benefits as well. One requires little effort besides paying your mortgage: equity.
Here’s a definition of what equity is, and what you can do with it.
Equity is a simple equation: it’s the difference between how much your home is currently worth and how much you owe on your mortgage.
For a ballpark estimate of your home's current equity, subtract your current mortgage balance from the appraised market value of your home.
Here’s an example: If your home is currently valued at $320,000 and your remaining balance on your mortgage is $140,000, your equity adds up to $180,000.
Want to put some of that equity to work for you? Check out equity-based lending products like home equity lines of credit (HELOCs) and home equity loans.
These products reward your investment in home ownership by providing large sums of funding at an attractive interest rate. They can help you finance home renovations, college tuition, even a new car or truck…at a lower interest rate than many other forms of credit. They’re also a smart way to pay off high-interest credit card debt.
Want to learn more? Contact one of our mortgage specialists for a complimentary estimate of your home’s current equity.
Source: Directors Mortgage, FreddieMac.com