Equity is the value of an asset (e.g house, car) minus any debts attached to that asset.
For a property, the equity would be the current market value of the property minus the balance of any loans attached to that property.
As an example, say we have a property as follows:
- The current value of a property is $1,000,000
- The loan balance against that property is $600,000
and
The equity in this property would be $400,000. That is $1,000,000 – $600,000 = $400,000
