What is home loan equity?

Home loan equity is the difference between the value of your property and the amount you owe to the bank.

For example if you have a home valued at $500,000 and you owe (or will owe) the bank $100,000, your equity is ($500,000 minus $100,000) which equals $400,000.

Knowing your equity is important when looking at getting a home loan as it affects other fees and charges you may be eligible for (such as lenders mortgage insurance). Some lenders also charge lower interest rates if your equity is above 20%