Finanzen · Glossar
What is Equity?
Schnelldefinition
The current market value of an asset minus any outstanding debt against it. What you actually OWN of the asset.
Vollständige Erklärung
Equity is ownership value. In real estate, home equity = current home value − mortgage balance. If your house is worth $400,000 and you owe $250,000, you have $150,000 in equity. In stocks, equity = share price × shares owned. In business, equity is the residual value after liabilities are subtracted from assets (book value). Equity grows through two mechanisms: paying down debt (deleveraging) and appreciation (the asset gaining value). Building equity is the primary wealth-building mechanism for most homeowners. A home equity loan or HELOC lets you borrow against that accumulated value, usually at lower rates than unsecured debt.
Verwandte Rechner
Calculators that use or explain Equity.
Verwandte Begriffe
More from Finanzen
APR (Annual Percentage Rate)
The yearly cost of a loan, expressed as a percentage, including most fees. Used when borrowing money.
APY (Annual Percentage Yield)
The yearly return on a deposit or investment, including the effect of compounding. Used when saving money.
Compound Interest
Interest calculated on the initial principal AND on the accumulated interest from previous periods. The engine of long-term wealth.
Simple Interest
Interest calculated only on the original principal, not on accumulated interest. Used in short-term and consumer loans.
Principal
The original sum of money borrowed or invested, not including interest. The base on which interest is calculated.
Amortization
Spreading loan payments over time so each payment covers both principal and interest, with the loan fully paid off at the end.
Last reviewed: June 15, 2026 • Category: Finanzen