Home equity
The part of your home you own outright: its value minus what you still owe on the mortgage.
Equity grows two ways: as you pay down the loan's principal and if the home's value rises. It shrinks if the home's value falls. Early in a mortgage, most of each payment is interest, so equity from payments builds slowly at first.
Equity is not cash. You get it out by selling, refinancing or borrowing against it, and each of those has costs.
Example
A home worth $300,000 with a $250,000 mortgage balance has $300,000 − $250,000 = $50,000 of equity.