Home Equity
Direct definition
The market value of your home minus what you owe on it.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
Home equity grows through appreciation and principal payments. You can access it through cash-out refinancing, home equity loans, or HELOCs.
Why it matters
It's a core piece of long-term household wealth and a source of low-cost borrowing.
Where you may see it
- Mortgage statement
- Appraisal report
- Closing Disclosure
A real-world example
A home worth $700,000 with $400,000 owed has $300,000 in equity.
Educational and illustrative only
A common misunderstanding
Home equity is not liquid cash — accessing it requires selling, refinancing, or borrowing against the property.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026