Building home equity is like making an investment that grows over time. Equity refers to the portion of a property's value that a homeowner truly owns, calculated by subtracting the amount still owed on the mortgage from the property's total value. The higher the equity, the more financial freedom and stability it brings to homeowners. Here are the top 10 ways to build home equity and make the most of your real estate investment:

Make a Sizeable Down Payment

One of the most direct ways of building equity is to make a more significant down payment when purchasing the house. The bigger the down payment, the smaller the mortgage loan amount, and subsequently, the higher the initial equity.

Accelerate Your Mortgage Payments

By making extra mortgage payments or increasing the amount you pay each month, you reduce the principal balance faster and build equity more quickly. Even small additional payments can have a significant impact over time.

Refinance to a Shorter-Term Loan

Refinancing to a shorter-term loan, like a 15-year mortgage instead of a 30-year mortgage, means higher monthly payments but also faster equity accumulation since you pay off the principal faster.

Improve Your Home's Value

Home improvements, remodeling, and upgrades can enhace your home's value, and as a result, increase your equity. Focus on projects with a high return on investment, such as kitchen renovations, landscaping, or adding energy-efficient features.

Maintain Your Home Regularly

Routine maintenance ensures your home's value does not depreciate due to neglect or wear and tear. Proper care keeps your property in good condition, helping you maintain or increase its value and your equity.

Make a Habit of Paying Bills on Time

A good credit score gives you access to lower mortgage interest rates, allowing you to borrow more for a given payment, which translates into more equity. Prompt bill payments also positively impact your credit score.

Keep Track of the Local Real Estate Market

Stay up-to-date with local real estate trends. By understanding your property's potential appreciation or depreciation, you can make informed decisions on when to sell, refinance, or invest more in your home to build equity.

Consider a Home Equity Loan or Line of Credit

Home equity loans and lines of credit allow you to borrow against the accumulated equity in your home. This borrowed money can be used for home improvements or other investments, which, when successful, can lead to increased equity. Be cautious, though, as these loans also put your home at risk if you cannot repay.

Remove Private Mortgage Insurance

If your initial down payment was less than 20%, you likely have private mortgage insurance (PMI) included in your mortgage payments. Once you reach 20% equity, request your lender to remove PMI, which automatically increases your equity by the amount you were paying monthly for the insurance.

Stay in Your Home Longer

The longer you own a home, the more likely you are to build substantial equity, provided your property's value appreciates over time. Patience pays off when it comes to equity-building in real estate.



Building home equity requires time, effort, and smart decision-making. Utilizing these top 10 ways to build equity in your home helps you make the most of your real estate investment, leading to financial stability and, ultimately, a more prosperous future.