Home Equity Debt

Business, Legal & Accounting Glossary

Definition: Home Equity Debt




Full Definition of Home Equity Debt


Home equity debt is a loan that is secured by the borrower’s home equity (the home’s fair market value less the amount of money still owed on the home). Broadly, there are two types of home equity debt: a home equity loan and a home equity line of credit. There are important differences between these two types of home equity debt. Home equity debt in the form of a home equity loan is a type of home equity debt that works like a first mortgage, with the loan paid out in a lump sum and repayment amortized over the length of the loan. Home equity debt in the form of a home equity line of credit (HELOC) is a type of home equity debt that works much like a credit card with a revolving balance and variable interest rate.


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Definition Sources


Definitions for Home Equity Debt are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February, 2020 | 3 Views.