The portion of your home you truly own — its value minus what you still owe.
Home equity is your home's market value minus the remaining mortgage balance. It grows as you pay down the loan and as the home appreciates. Equity can be borrowed against through a home equity loan or line of credit, and it is often a major component of net worth, though it is far less liquid than cash or investments.
A $500,000 home with a $300,000 mortgage represents $200,000 of home equity.