equity

noun

The value remaining in a property after all debts, liens, and other charges against it are taken into account.

To determine the equity in a property, deduct these amounts from the selling price or appraised value of the property.

This is why some people use the phrase 'building equity' in reference to paying off a mortgage loan. As the outstanding loan amount shrinks, there is more value left over in the property.


Search dictionary: or ask Peter!

Get monthly real estate advice in your inbox, free! privacy policy