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Loan basics

Home equity

Also known as: equity, owner equity

The portion of the home’s value you own after subtracting what you owe.

Home equity is roughly home value minus outstanding mortgage (and other lien) balances. Lenders use equity and combined loan-to-value when sizing a HELOC or cash-out refinance. Equity changes as you pay down principal or as home value changes.

See also

HELOCLoan-to-value (LTV)Combined loan-to-value (CLTV)Loan balance
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Definitions are for general education. Loan products, insurance, and taxes vary by lender, location, and your situation. FinanceFlow calculators produce estimates only and are not a lender quote or professional advice.