Home equity is the difference between your home's current market value and the amount you still owe on your mortgage. It's the portion of your home you truly own, and it typically grows over time through mortgage payments and home value appreciation.

How much home equity do I have?

To calculate your home equity, subtract your remaining mortgage balance from your home's current market value. Most lenders will also factor in a maximum combined loan-to-value ratio, usually around 80-85%, when determining how much of that equity you can actually borrow against.

What's the difference between a HELOC and a home equity loan?

A home equity loan provides a lump sum with a fixed rate and fixed payments, best for a known, one-time expense. A HELOC provides a revolving line of credit you draw from as needed, typically with a variable rate, best for ongoing or uncertain expenses.

How do I use home equity?

Common uses include home renovations, debt consolidation, education costs, medical expenses, and funding a down payment on another property. Once approved, there's no restriction on how the funds must be used.

What are the requirements to qualify for a home equity loan or HELOC?

Lenders typically look at your available equity, credit score, debt-to-income ratio, income, and the property's occupancy type, considered together rather than any single factor alone.

How much can I borrow against my home equity?

Most lenders allow you to borrow up to 80-85% of your home's value, combined with your existing mortgage balance. The exact amount depends on your credit profile and the lender's specific guidelines.

Is interest on a home equity loan or HELOC tax deductible?

Interest may be tax deductible if the funds are used to buy, build, or substantially improve the home securing the loan. Tax situations vary, so it's worth confirming your specific circumstances with a tax professional.

How long does it take to get a home equity loan or HELOC?

Timelines vary by lender, but most home equity loans and HELOCs close within a few weeks of application, following an appraisal and underwriting review.

Does applying for a home equity loan or HELOC hurt my credit?

A hard credit inquiry is required as part of the application process and may cause a small, temporary dip in your score. Multiple inquiries within a short window are usually counted as one by the major credit bureaus.

Home equity: put what you've built to work

Already know your home has value beyond the mortgage you owe? This is where you find out what home equity is, how much you may have access to, and which option, a HELOC, a home equity loan, or a cash-out refinance, fits with what you're trying to do.

Atlantic Bay helps homeowners in Virginia, North Carolina, Georgia, Florida, and beyond put their home equity to work, whether that means a kitchen remodel, paying down higher-interest debt, or covering a major expense. A local Mortgage Banker can walk you through your real numbers and the options available to you.

Get Started with a Mortgage Banker See What You Qualify For

Begin your home equity journey

You know your home has equity. Now it's about figuring out how much, and which option, makes sense for your long- and short-term goals.

I want to renovate or remodel my home.

Kitchen updates, additions, or full renovations. Your home's equity can help fund the project, often at a lower rate than a personal loan or credit card.

Explore Home Improvement Financing

I want to consolidate high-interest debt.

Rolling credit card balances or other high-interest debt into your home equity can mean one payment and a lower overall rate. It's worth comparing the real numbers.

See How Debt Consolidation Works

I need funds for a major expense.

Education costs, medical bills, and other large expenses may be easier to manage by borrowing against the value you've built, rather than tapping savings or high-rate credit.

Compare Your Equity Options

I want to compare a HELOC and a home equity loan.

Should you get a lump sum with a fixed rate, or a flexible line of credit you draw from as needed? The right structure depends on how and when you plan to use the funds.

Compare HELOC vs. Home Equity Loan

I want a lump sum for a large, one-time need.

If you know the exact amount you need for a single project or expense, a cash-out refinance replaces your current mortgage while giving you access to funds in one deposit.

Learn About Cash-Out Refinancing

What is home equity?

Home equity is the portion of your home you actually own, the difference between your home's current market value and the balance remaining on your mortgage. If your home is worth $400,000 and you owe $250,000, you have $150,000 in equity.

Equity builds in two ways: paying down your mortgage balance over time, and your home's value increasing. Most homeowners build meaningful equity within the first several years of homeownership, and that equity is usually the largest source of borrowing power a homeowner has.

Lenders generally allow you to borrow against a portion of your equity, but not all of it, since a certain amount must stay in the home as a buffer. How much you can access depends on your home's value, your remaining mortgage balance, and the lender's combined loan-to-value (LTV) guidelines.

Tap Into Home Equity

HELOC vs. Home Equity Loan: Which Is right for you?

Both let you borrow against the equity in your home, but they work differently depending on how you plan to use the funds.

A home equity loan gives you a lump sum upfront with a fixed interest rate and a fixed monthly payment. It works well when you know the exact amount you need, like a specific renovation or a one-time expense, and want predictable payments over the life of the loan.
Learn 5 reasons to tap into your home equity
A HELOC works closer to a credit card, secured by your home. You're approved for a credit limit and can draw funds as needed during the draw period, paying interest only on what you've borrowed. This flexibility makes it a good fit for ongoing or uncertain expenses, like a phased renovation, though rates are variable.
Neither option is “better” per se; the right choice depends on whether you need a fixed amount or ongoing access, and how you feel about a fixed versus variable rate.
Explore Your Options

Compare HELOC vs. Home Equity Loan

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How to use your home equity

Homeowners use their equity for a wide range of goals. Common uses include:

Home renovations and improvements, from kitchen updates to full additions
Consolidating high-interest credit card or personal loan debt
Covering education costs or tuition
Paying for major medical expenses
Funding a down payment on an investment or second property
Building an emergency reserve for unexpected costs

Explore Your Options

Home equity requirements

Wondering if you qualify to borrow against your home equity? Lenders look at a few key factors together to determine what you can access.

Available equity: most lenders allow you to borrow up to 80–85% of your home's value, combined with your existing mortgage balance
Credit score: affects your rate and which programs you qualify for
Debt-to-income ratio (DTI): your monthly debts compared to your gross monthly income
Income and employment: lenders want to see stable, verifiable income
Property type and occupancy: primary residences typically have the most flexible guidelines

See If You Qualify

See what your equity can really do. Our local Mortgage Bankers can help. There's no pressure and no commitment to walkthrough your options.

Find a Mortgage Banker

Frequently asked questions about home equity

If your questions aren’t answered here, please reach out to an Atlantic Bay Mortgage Banker.

Home equity is the difference between your home's current market value and the amount you still owe on your mortgage. It's the portion of your home you truly own, and it typically grows over time through mortgage payments and home value appreciation.
To calculate your home equity, subtract your remaining mortgage balance from your home's current market value. Most lenders will also factor in a maximum combined loan-to-value ratio, usually around 80–85%, when determining how much of that equity you can borrow against.
A home equity loan provides a lump sum with a fixed rate and fixed payments, best for a known, one-time expense. A HELOC provides a revolving line of credit you draw from as needed, generally with a variable rate, best for ongoing or uncertain expenses.
Some common uses of home equity include home renovations, debt consolidation, education costs, medical expenses, and funding a down payment on another property. Once approved, there's no restriction on how the funds must be used.
Lenders typically look at your available equity, credit score, debt-to-income ratio, income, and the property's occupancy type, considered together rather than any single factor alone.
Most lenders allow you to borrow up to 80–85% of your home's value, combined with your existing mortgage balance. The exact amount depends on your credit profile and the lender's specific guidelines.
Interest may be tax deductible if the funds are used to buy, build, or substantially improve the home securing the loan. Tax situations vary, so it's worth your time confirming your specific circumstances with a tax professional.
Timelines vary by lender, but most home equity loans and HELOCs close within a few weeks of application, following an appraisal and underwriting review.
A hard credit inquiry is required as part of the application process and may cause a small, temporary dip in your score. Multiple inquiries within a short window are usually counted as one by the major credit bureaus.

couple sitting on the couch using electronics

Take the next step with your home equity

If you're still exploring, begin by estimating how much equity you have available. If you're ready to see real numbers, our calculator is a good place to start. And when you're ready to talk, our local Mortgage Bankers are available all week for a personalized review of your options.

Explore Your Options Get Started With a Mortgage Banker

Disclosure: Information is for educational purposes only and should not be relied upon by you. Discussions regarding any financial information provided are not intended as individual recommendations and do not reflect the views or advice of Atlantic Bay Mortgage Group, L.L.C. The views expressed are subject to change at any time in response to changing circumstances in the market. Other loan program restrictions and eligibility requirements may apply. For refinances, the total finance charges may be higher over the life of the loan. Atlantic Bay Mortgage Group, L.L.C. disclaims any obligation to publicly update or revise any views expressed or information given. Loan programs may change at any time with or without notice. Information deemed reliable but not guaranteed. All loans subject to income verification, credit approval and property appraisal. Not a commitment to lend. Atlantic Bay Mortgage Group, L.L.C. NMLS #72043 (nmlsconsumeraccess.org) is an Equal Housing Lender. Located at 600 Lynnhaven Parkway Suite 100 Virginia Beach, VA 23452.