Equity
Definition
The difference between your home's current value and your remaining mortgage balance.
Equity is what you can borrow against (HELOC, refinance) or what you keep when you sell.
Equity grows two ways: every payment chips away at your principal, and any rise in your home's market value accrues entirely to you. On an $800,000 home with a $500,000 mortgage, you hold $300,000 in equity — a real, borrowable asset.
Canadian lenders generally let you access up to 80% of your home's value combined across all charges. On that same home, 80% of $800,000 is $640,000 — so you could borrow up to $140,000 on top of your existing $500,000 mortgage through a refinance or HELOC.
Equity is the engine behind debt consolidation, renovations, a rental-property down payment, and tuition funding — almost always at a far lower rate than credit cards or unsecured loans. The trade-off is that the debt is secured against your home, so the plan to repay it matters.
Sources
- Borrowing against home equity (Financial Consumer Agency of Canada)
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