Equity


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