"Home equity" is the fair market value of a home minus the total amounts of any mortgages on the home. For example, if your home is worth $200,000, and you have a mortgage with $100,000 left to be paid and a second mortgage with a $25,000 unpaid balance, your home equity is $75,000. Home equity is essentially a way of expressing your ownership interest in the home, and it can be used as collateral to secure home equity loans.