Equity Loans

Equity Loans

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.

EXAMPLE:

YOUR HOME MORTGAGE BALANCE:

$350,000

YOUR HOME VALUE:

$500,000

YOUR HOME EQUITY:

$150,000

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.