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Real Estate vocabulary · Mortgages & Financing

Equity

Meaning in real estate, with examples

/ˈekwəti/nounCommon term

In real estate, equity means: The part of a property's value that the owner truly owns: its current market value minus whatever is still owed on the mortgage.

In Turkish: özkaynak, mülkteki net pay, öz sermaye

How it is used

Owners build equity as they pay off the loan and as prices rise. People can borrow against their equity, for example with a home equity loan. Negative equity means the home is worth less than the loan.

Example sentences

  1. After ten years of payments, they have about 60% equity in the house.

  2. They used some of their home equity to pay for the renovation.

Common collocations

  • build equity
  • home equity
  • negative equity
  • equity release
  • borrow against equity
  • mortgageA long-term loan used to buy a property, in which the property itself serves as security for the lender until the loan is paid back.
  • loan-to-value ratioThe size of a mortgage compared with the value of the property, shown as a percentage. A 200,000 loan on a 250,000 home is an 80% ratio.
  • refinanceTo replace an existing mortgage with a new one, usually to get a lower interest rate, change the term or borrow extra money against the property.
  • market valueThe price a property would most likely sell for on the open market, between a willing buyer and a willing seller who both know the relevant facts.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Mortgages & Financing

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