If you own a home in York, understanding equity in a mortgage is key. Equity is the portion of your home that you own outright.

You calculate it by subtracting what you still owe on your mortgage from the property’s current market value. So, if your home is worth £250,000 and you owe £150,000, your equity stands at £100,000.

How Does Equity Build Over Time?

Your equity grows in two main ways. First, as you pay off your mortgage each month, you reduce your balance and increase your ownership of the home.

Second, if property prices rise in York, your home’s value goes up, and with it, so does your equity. On the flip side, if property values drop or you take out more borrowing against the home, your equity could shrink.

Why is Equity Important?

Building equity gives you more control and options. Lenders often give better mortgage deals to people with higher equity.

That’s because you’re borrowing a smaller percentage of the property’s value, which is seen as lower risk.

Your equity can also be a helpful resource when you need access to funds, whether that’s for big expenses or improving your financial situation.

How Can You Use Your Equity?

Many homeowners in York use their equity by remortgaging. This means switching to a new mortgage deal and borrowing more, based on your property’s current value.

If your home has gone up in value or you’ve paid off a chunk of your mortgage, you might qualify for extra funds.

Another route is a further advance. This lets you borrow more from your current lender, usually without switching mortgage providers.

It can be quicker than remortgaging, though the new borrowing might have a different interest rate.

If you’re 55 or over, you might want to consider equity release in York. A lifetime mortgage is the most common way to do this.

You borrow money based on your home’s value and don’t need to make monthly repayments. Instead, the loan is repaid when your home is sold, usually when you pass away or move into long-term care.

Many use this option to boost retirement income, fund home improvements, or help family financially.

Date Last Edited: June 3, 2025