Equity is simply the difference between the current value of your property and the amount you still owe on your mortgage.

As you pay down your mortgage over time, and if the value of your property rises, your equity increases.

Knowing how much equity you have can help you decide what is possible when it comes to borrowing, releasing funds, or planning for the future.

How Equity Builds Up

Each time you make a mortgage repayment, a portion goes towards reducing the capital you owe.

As this balance decreases, your share of ownership, or equity, grows.

If property prices rise in Leicester, this can boost your equity even further.

For example, if your home was originally valued at £200,000 and is now worth £250,000, your equity will have increased as a result of that growth, assuming your mortgage balance has stayed the same or reduced.

Many homeowners review their mortgage options once they have built up significant equity, whether to secure a better deal or to access funds for other purposes.

How Equity Can Be Used

There are several ways to make use of the equity in your home.

One of the most common is to remortgage and release some of this equity as a cash lump sum.

This can be used for home improvements, helping family members, or consolidating debts.

For homeowners aged 50 and over, another option is to explore equity release advice in Leicester.

This involves borrowing against your property’s value, usually through a lifetime mortgage, without the need to sell your home.

Each option comes with its pros and cons, so it is important to seek advice before making any decisions.

Factors To Consider

Using the equity in your home is a significant step.

Remortgaging to release equity will increase the amount you owe, which may affect your monthly repayments and the total interest paid over time.

If you are considering a lifetime mortgage, understanding how interest builds up and how it affects your estate is key.

Exploring the full range of options, including lifetime mortgages in Leicester, will help you make an informed choice.

Speaking to one of our expert mortgage advisors in Leicester is the most suitable way to review what is available and what is most suitable for your needs

Date Last Edited: June 13, 2025