what is equity and Do I get it back?

[gg12346]

if i have put 25% percent deposit in massive house only to get the house and reduce my mortgage years to less than 20.I wanted to ask whether after 15 years suppose I sell the house to downsize .Will I get my 25 percent back .

It depends on the cost of the house. The 25 percent you put down isn't enough to buy the house so you borrow the rest via a mortgage which is just a loan specifically for houses to put it simply.
You then spend lots of years paying it back or part if it if you sell before it is all repaid. When you sell the house any outstanding mortgage loan left has to be paid and the rest is yours to keep or more usually put towards another property.

P. S .
So people talk about building up equity in a house by repaying the loan but also by the house price going up over the years which is the normal outcome. Therefore when you sell the house it should be worth more than you paid for it so you have made money on it and often people will.use that to move ip to a bigger or better house . This is what is meant by the mortgage ladder as you go up to the next rung.
However in odd instances such as a full.on financial crisis the price can drop so sometimes people end up in negative equity because they owe more mortgage than the house is worth so selling it wont be enough to pay back the mortgage amount owing. But as you have a 25 percent deposit that is highly unlikely and house prices seem to be on an ever upward trend anyway . Hope all that made sense.

The 25% will be part of the house equity 15 years down the road. Equity size very much depends on the housing market, house prices spiralling down leaves you with less equity and potentially (but unlikely) could negatively effect your deposit, house prices spiralling up leaves you with more equity. The likelihood in 15 years is you may want to use the 25% towards your next property or you may take the 25% back

The above comments from PPs regarding repayment of your mortgage helping to build up equity also presumes that you don’t have an interest only mortgage, and that your repayments will pay back capital as well as interest. Otherwise, if your mortgage is interest only, then when you come to sell the property in the future will only be the result of your initial deposit and the value of the property having increased over time.

Using a simple example, if the house costs £200k now and you have £50k deposit and £150k mortgage, then over the next five years your repayments reduce the mortgage value by £20k and the house value goes up to £240k. At the point your equity is the difference between the £240k value and £130k remaining mortgage, ie £110k. This equity balance includes the £50k you put in as a deposit.

Equity is the amount of house owned by you rather than the amount paid for by your loan from the mortgage lender.

So you currently own 25%.

This amount will increase due to the repayment part of your mortgage (not the interest payment, that goes straight to the lender), and by any increase in value of the house.

You could lose your equity, yes, if house prices fell so low that the eventual value of your house was equivalent to the amount of the mortgage. That happened in the l90s (I think) when people were in ‘negative equity’. I.e owed more to the lender than the house was currently worth.

People sat it out, and prices moved up again.

You pay your payments every month to repay the 75%.

If you downsize before mortgage is paid off, you will sell the house for market value, then repay what’s outstanding on the mortgage.
If you sell the house once the mortgage is paid off, the value of the house is all yours.

Equity is the value of the house you do not owe to someone else, Ie the mortgage company

So if you buy a house for 200k and put down 25k, you have 25k equity and you owe the bank 175 (at base and exc any penalties, fees etc)

If you sell it say in ten years. And the house is worth 250 at that point, and you’ve 100k left on the mortgage your equity is 150 k and that cash is yours. Because you owe the mortgage company 150 and need to pay the debt.

If however you sell it in ten years and it’s worth 75 k at that point (highly unlikely but say you let it go to ruin) then you have no equity, you’d pay the mortgage company back and still owe them 25.

The equality is the difference between the mortgage and the value.