How do I calculate my home equity?

Subtract the total you owe against the home, your mortgage balance plus any secondary loans, from the home's current market value. The remaining amount is your equity.

How can I access my home equity?

Common options include a home equity line of credit, refinancing your mortgage, or taking a second mortgage. Each lets you borrow against your equity without selling, though terms and costs differ.

How does equity grow?

Equity grows in two ways: as you pay down your mortgage principal, and as your home increases in market value. Making extra payments and holding the property over time both help it build.

Mortgage Glossary

What is Equity?

Equity is the portion of your home that you truly own, calculated as the property's current market value minus the balance still owed on your mortgage and any other loans against it. As you repay your mortgage and as the property value rises, your equity grows. It is one of the main ways home ownership builds wealth.

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Quick answer

Also known as: home equity, ownership stake

Key points

Equity is market value minus what you owe against the home
It grows as you pay down principal and as the home appreciates
Equity is a major way home ownership builds wealth
You can access it through a HELOC, refinancing, or a second mortgage
Reaching 20% equity can remove the need for mortgage insurance
Equity is realized in cash when you sell the property

Equity explained

Equity is the value of your ownership stake in a property. You calculate it by subtracting everything you owe against the home, your mortgage and any secondary loans, from the home's current market value. The result is what would remain if you sold and cleared those debts.

Equity grows in two ways: by paying down your mortgage principal and by the home appreciating in value. Homeowners can access their equity through tools like a home equity line of credit, refinancing, or a second mortgage.

What a Equity is for

Equity represents the real wealth you hold in your home. It can be left to grow as a long-term asset, tapped for major expenses, or realized in cash when you sell. It also strengthens your position when refinancing or borrowing.

How it can help you

Building equity gives you financial flexibility, from funding renovations to consolidating debt or buying your next home. When you are ready to refinance or borrow against it, Lenderoo compares 40+ lenders for free so you can access your equity on the best available terms.

When it comes up

After several years of payments and rising home values, a homeowner uses their built-up equity to open a home equity line of credit, funding a renovation without selling the property.

Example: Calculating home equity

Nadia's home is worth $500,000 and she still owes $300,000 on her mortgage.

Her equity is $500,000 minus $300,000, which is $200,000. If her home rises in value to $550,000 and she keeps paying down the mortgage, her equity grows further, giving her more to borrow against or realize when she sells.

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Questions & answers

Equity: frequently asked questions

Common questions Canadians ask about equity.

Keep learning

Related mortgage terms

HELOC (Home Equity Line of Credit)

A line of credit secured by home equity.

Read definition

Refinancing

Replacing your existing mortgage with a new one.

Read definition

Second Mortgage

An additional loan secured against a property that already has a first mortgage registered on its title.

Read definition

Principal

The original amount borrowed, excluding interest.

Read definition

Loan-to-Value Ratio (LTV)

The ratio of the mortgage amount to the property's value, shown as a percentage.

Read definition

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Find my best mortgage Explore the glossary

Mortgage Glossary

What is Equity?

Find my best mortgage Back to glossary

Quick answer

Also known as: home equity, ownership stake

Key points

Equity is market value minus what you owe against the home
It grows as you pay down principal and as the home appreciates
Equity is a major way home ownership builds wealth
You can access it through a HELOC, refinancing, or a second mortgage
Reaching 20% equity can remove the need for mortgage insurance
Equity is realized in cash when you sell the property

Equity explained

What a Equity is for

How it can help you

When it comes up

After several years of payments and rising home values, a homeowner uses their built-up equity to open a home equity line of credit, funding a renovation without selling the property.

Example: Calculating home equity

Nadia's home is worth $500,000 and she still owes $300,000 on her mortgage.

Have a question about equity?

Lenderoo shops 40+ lenders for free and matches you with a mortgage professional who explains every term — and finds your best rate.

Get pre-approved free Talk to an expert

Questions & answers

Equity: frequently asked questions

Common questions Canadians ask about equity.

Keep learning

Back to full glossary

Understand your mortgage with confidence

Lenderoo shops 40+ lenders for free and pairs you with a mortgage professional who keeps the jargon simple — and gets you a great rate.

Find my best mortgage Explore the glossary