Home equity is the market value of a homeowner's unencumbered interest in their real property, that is, the difference between the home's fair market value and the outstanding balance of all liens on the property.
In economics, home equity is sometimes called real property value.
Many home equity plans set a fixed period during which the homeowner can borrow money, such as ten years.
At the end of this “draw period,” the borrower may be allowed to renew the credit line.
Some plans may call for payment in full of any outstanding balance at the end of the period.