Definitions (4)

2. Total assets minus total liabilities; here also called shareholder's equity or net worth or book value.
3. Real Estate: The difference between what a property is worth and what the owner owes against that property (i.e. the difference between the house value and the remaining mortgage or loan payments on a house).
4. In the context of a futures trading account, it is the value of the securities in the account, assuming that the account is liquidated at the going price. In the context of a brokerage account, it is the net value of the account, i.e. the value of securities in the account less any margin requirements.

See also: List of Key Accounting Terms and Definitions at InvestorGuide.com.

Use equity in a sentence

The equity on her parents' house was enough that she was still able to sell the house at a profit after the tragic accident that claimed both their lives.

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Having purchased during the market downturn, the homeowners were delighted to find the equity in their home had more than doubled given current market demand.

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In a rising market homeowners gain significant equity and therefore are able to qualify for better interest rates if they refinance, but in the absence of significant house price gains or a reduction in interest rates they will just incur another set of mortgage origination fees.

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