Home equity is the portion of your home that you own — built over time as you pay down your mortgage and your home’s value changes.
As you make mortgage payments and property values increase, you may build equity. Equity represents the difference between what your home is worth and what you still owe on your mortgage.
For many homeowners, equity becomes an important financial asset that can grow over time. Building equity is one way homeownership can support long-term financial stability and generational wealth. It may also provide financial flexibility and help homeowners invest in repairs, education, businesses, or future generations.
These resources can help you understand the power of home equity:
- Building wealth through homeownership explains how home equity works — how it grows as you pay down your mortgage and your home’s value changes — and how understanding it can help homeowners make informed financial decisions. Learn more
- Home equity and financial needs explores ways homeowners can use equity to meet financial needs, along with the important risks and considerations to understand before borrowing against a home.. Learn more
- Understanding home equity loans and home equity lines of credit (HELOC) breaks down the differences between HELOCs and home equity loans, including how each works and what to consider before borrowing. Learn more
- Aging in place explores how homeownership and accumulated equity can support housing stability and changing financial needs for older adults later in life. Learn more
