To deliver the best experience we store cookies on your device. Please accept our Term of Service to continue.

What is Equity in real estate?


What is real estate equity?


Real estate equity is the ownership interest in a property. Typically, a property is purchased with a mortgage loan at a specified loan-to-value ratio (LTV).


How to calculate real estate equity?


Equity = Market Value - Loan Value


For example, if you own a property that, based on comps or an appraisal is worth $100,000, but you have a $75,000 mortgage loan, then your equity is $25,000.


$25,000 = $100,000 - $75,000