An equity loan uses the equity in a property you already own as collateral to secure the new loan. The equity in the original property is simply the difference between what you owe on the property and its actual market value.
YOUR HOME MORTGAGE BALANCE:
YOUR HOME VALUE:
YOUR HOME EQUITY:
You can use an equity loan for renovation, investments, to purchase another property or to refinance your mortgage. Most banks will loan only a percentage of your equity, typically around 90 percent.