ABA Family Legal Guide

Home Ownership

The Financial Side of Home Ownership

Understanding Your Mortgage

How do I determine how much equity I have in my home?

Equity is the value of your unencumbered interest in your home. It's determined by subtracting the unpaid mortgage balance and any other home debts, such as a second mortgage or home equity loan, from the home's fair market value. For example, if your mortgage is $50,000 and your home is worth about $100,000, you would have $50,000 in equity, or 50 percent equity, in your home. On the other hand, if the value of your home has fallen, you may have less equity than when you bought the home.