Financial Advice Category
Financial Advice Category

Knowledge Hub

This is a free financial education resource. Some of the products mentioned may not be offered by Horizon Credit Union at this time

Building Equity in Your Home

Building Equity in Your Home

If you own a home, the mortgage payments you make each month could help you build a substantial asset - home equity. The home equity you build represents how much of your home you own, which can grow with time.

  • Borrow money through a home equity line of credit or home equity loan
  • Receive cash once you sell your house
  • Use it for your next down payment

What is Home Equity?

The home equity you build represents how much of your home you own, which can grow with time. To calculate this value, subtract your loan's balance from your home's market value. Click here to determine your home’s current equity!

Unsure of how much your home is worth? No problem! Click here for helpful tips and advice for estimating your home’s market value.

Building Equity in Your Home

There are many ways to build up your home's equity:

  1. Make a Large Down Payment

    Making a bigger down payment when you purchase a home gives you instant equity. Plus, when you put 20% or more of your property's value down, you avoid having to pay expensive private mortgage insurance.
  2. Pay More Each Month

    If you choose to add more to your payment each month, ensure the money you’re adding will apply to the principal. Click here to calculate what paying extra can do for you!

    Keep an eye on your monthly mortgage statements to ensure the money is being credited accurately and reach out to your lender if you have questions. To add to your payment you can:

    • Add more money to your monthly payment. Make sure it’s enough to make a difference without harming your budget.
    • Instead of making monthly payments, pay biweekly. This will add an extra monthly payment to your loan each year.
    • Schedule additional automatic payments with your credit union at regular intervals.
  3. Enhance the Property

    Home improvements, remodeling and curb appeal projects can boost the equity of your home. Click here to read some of the best projects to consider when increasing your home’s value.

    Projects that will increase your home’s value include:
    • Small Projects – Replacing a front entry door, a garage door, adding attic insulation, etc.
    • Energy Efficiency – Install double-paned windows, switch to LED lighting, upgrade to energy-efficient appliances, add a smart thermostat, add solar panels, etc.
    • Large Projects – Modern bathrooms and kitchens are always sought after, along with finished basements and decks.


It can take some time to build equity, but it is worth it. After you have built up enough equity, you can turn around and draw from it through a home equity credit line or home equity loan. Boosting your property's value, making a larger down payment, and paying more on your mortgage each month are only some ways of growing your equity.