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What is Home Equity in Real Estate?

What is Home Equity in Real Estate?
November 25, 2016 Josh Rowe
home equity real estate

What is Home Equity in Real Estate?

The definition of home equity is simply the difference between your property’s value and what is owed on your mortgage.

For example:

If your property is valued at $800,000

And you still owe $300,000 on your home loan

Then you could have up to $500,000 in home equity.

The more you pay down on your mortgage and the more your property value grows, then your home equity increases.

Using Home Equity to Build Wealth

Your home equity could be used for purchasing property for investment, for example the deposit. Property investors may also be able to negatively gear their investment properties.

Depending on your financial circumstances and professional advice you receive you may be able to use your home equity for a new car, home renovations or other investment opportunities.


Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial advisor to consider how appropriate the advice is to your objectives, financial situation and needs.



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