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How to build home equity


A woman carries boxes into her new home

Your home is one of your greatest assets, and can be a valuable financial tool.

Typically, equity is built in two ways: 1) through increasing your property value, or 2) through decreasing the amount of debt owing on your home. There are many ways to accomplish both.

Here are several ideas for how you can build equity in your home:

1. Increase your property value

Aside from letting rising prices in your housing market dictate what your home is worth, there are several ways to boost property value.


The simplest way to increase or maintain the value of your home is to pay attention to general upkeep. Take the time to repair cosmetic blemishes like scratches, paint chips, and marks. Quarterly run-throughs to keep your home presentable can pay dividends.

Pay special attention to main turnkey selling points of your home. Issues with your roof or mechanical systems can impact market value and turn off potential buyers.

Home improvements

Updating your kitchen and bathrooms can make a significant difference in the value of your home. The key is to understand the potential return on investment earned for doing the work. Consider speaking to a seasoned real estate professional in your area and learn about current home buying trends so you can make an informed investment on upgrades.

Small improvements can go a long way too. Changing paint, swapping out light fixtures, even replacing your vent covers; it all makes a difference.

A Meridian Flex Line Mortgage includes market leading low interest rates to finance home improvement projects of any size and may be a great option.

Curb appeal

First impressions make a big impact on prospective buyers, so make sure your house makes an impression even before anyone steps inside.

Consider investing in long-term landscaping improvements for your home like planting trees. They’ll increase curb appeal and potentially lessen home cooling costs by providing shade. For more immediate improvements, you can add potted plants into the mix, update gardens, or reseal asphalt - just to name a few ideas.

2. Decrease the amount of debt owing on your home

Paying down your mortgage sooner can make a huge impact when it comes to saving money on the interest paid on your principal debt and can also help with budget planning.

You can start with these tips:

Bigger down payment

Decrease the amount of debt owing on your home right off the start by putting down a larger down payment. This money immediately translates into equity, reduces interest costs and can allow you to avoid the cost of mortgage loan insurance.

Shorter amortization

Another way to pay down mortgage debt and build equity is to reduce the amortization period of your loan. Although this can trigger an increase in your monthly payments, a shorter amortization period will allow you to pay off your mortgage faster and can save you money on interest paid on your principal debt.

Understandably, increased monthly payments may not be viable for many homeowners. Another option to accelerate equity building is by making lump sum payments against the outstanding principal on your home. This can reduce your interest payments and shorten the time required to pay off your mortgage.

Increase your payments

There’s always a little more that can be done to pay down your debt and build home equity. One of the most basic ways is to increase payments on your mortgage. This can be as simple as bumping up your monthly or bi-weekly payments to a round number (this can also help with budget planning).

Start by assessing your monthly budget and figure out how you can direct more income toward asset building.

If you have any other questions, we encourage you to speak with a Meridian Mortgage Specialist today.

Meridian Credit Union communications are intended for informational purposes only and do not constitute financial advice or an opinion on any issue. We would be pleased to provide additional details or advice about specific situations if desired.

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