Knowing what equity in a mortgage means could help you get more from your property. Equity is the portion of your home’s value that you own outright.
You can work it out by taking your home’s current value and subtracting whatever is left on your mortgage.
For example, if your home’s worth £240,000 and your remaining mortgage is £140,000, you’ve built up £100,000 in equity.
How Does Equity Grow?
Equity tends to build up over time. Each monthly mortgage payment chips away at your loan balance, which means more of the property belongs to you.
On top of that, if house prices in Sunderland rise, the value of your home increases, and so does your equity.
Of course, the opposite can happen too, if prices fall, or if you borrow more against your home, your equity can shrink.
Why Equity Matters
The more equity you hold, the more flexibility you’ve got when it comes to your mortgage. People with higher equity usually have access to better deals and lower interest rates.
It also puts you in a stronger position if you ever want to remortgage, move home, or borrow more.
If you’re thinking about retirement planning, equity can play a part there too, many people use it to support their lifestyle or help family.
Ways to Use Your Equity
Remortgaging is a common route. You may be able to release equity if your property’s gone up in value since you took out your mortgage.
Some homeowners use this to fund renovations, pay off debts, or cover big costs like helping children buy their first home.
If you’re not keen on switching your mortgage, a further advance might be an option. That’s when your current lender agrees to lend you more money, often under a new interest rate.
Then there’s equity release in Sunderland, which is designed for homeowners aged 55 or over
A lifetime mortgage in Sunderland is the most well-known type, it lets you access tax-free cash from your home, with no monthly repayments.
Instead, the loan is usually repaid when your home is sold, typically after you pass away or move into care.
Date Last Edited: 03/06/2025
