If you purchased your house in the 1990s or early 2000s, there’s a good chance it’s worth exponentially more than what you paid for it.
A Realtor.com analysis of seller data found that home values have increased 90% on average in the past 20 years. That means a house purchased in 2005 for $229,000 (the median home price at the time) is now worth $435,300.
Want to figure out your home equity? Learn how to calculate it here
“If you’ve owned your home for 10, 20 or even 30 years, you’re likely sitting on a financial asset that’s grown far more valuable than you think,” Realtor.com senior economic research analyst Hannah Jones said in the report. “Home prices across the U.S. have risen dramatically over the past few decades, in many markets doubling, tripling, or more since the early 2000s.”
That means many homeowners who stayed put for the last quarter century have hundreds of thousands of dollars in additional home equity. They may even be able to borrow more than they paid for their home.
If the buyer who paid $229,000 in 2005 put down 20% and has been steadily making mortgage payments, they’d have an astounding $336,117 in home equity in 2025.
They could take out a home equity line of credit with a loan-to-value ratio of 80% and borrow up to $249,357 — over $40,000 more than what they paid for the house.
“This equity isn’t just a number on paper; it’s real wealth you can use,” Jones said.
How to use your home equity
With a home equity loan or home equity line of credit (HELOC), you can borrow at least 80% of your property’s value. To qualify, you’ll need a credit score of 650 to 680, a debt-to-income ratio of no more than 43%, and at least 20% equity. A home equity loan is disbursed in a lump sum and typically repaid over a 20-year period. A is a revolving line of credit that you can use for up to 10 years.
You’ll make interest payments during the draw period, followed by 20 years of principal and interest payments.
Both HELOCs and home equity loans are considered second mortgages. You may want a cash-out refinance, which replaces your current home loan with a larger mortgage and allows you to pocket up to 80% of the home’s remaining value. Unlike a HELOC or home loan, you still only have one mortgage.
With a home equity investment agreement, you’ll sign over a portion of your home’s current and future value for a lump sum of cash. These agreements can appeal to homeowners who have built up equity but lack cash, or whose credit isn’t strong enough for a home equity loan or a cash-out refinance
You can leverage equity to access cash through home equity sharing or a home equity loan.
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