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Glossary Finance

Equity

Equity is the part of an asset you truly own: its current value minus what you still owe against it.

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In more detail

A home worth $350,000 with $220,000 left on the mortgage gives $130,000 of equity. Equity grows as you pay down the loan and as the home's value rises, and can be borrowed against with a home equity loan. In business and investing, "equity" also means ownership shares in a company.

Try these tools

Home Equity Loan Calculator

The Home Equity Loan Calculator helps you estimate monthly payments based on loan values.

See also

  • Glossary Loan-to-value ratio (LTV)
    The loan-to-value ratio (LTV) is the loan amount divided by the value of the asset securing it, a key measure of lender risk.
  • Glossary Principal
    The principal is the original amount of money borrowed or invested, before any interest is added.
  • Glossary Down payment
    A down payment is the part of a purchase price you pay upfront from your own money, with a loan covering the rest.
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