Strategies to Grow Your Home Equity Over Time

Learn actionable ways to build more ownership in your home, beyond just making mortgage payments.

By Garret Merkley · Explainer · Jun 3, 2026

Branched from How to Calculate Your Home Equity

Quick take

Pay down your mortgage principal faster.
Invest in smart home improvements that add value.
Maintain your home to protect its market value.
Monitor local housing market trends to understand potential appreciation.

Home equity is the portion of your home that you truly own. It's calculated by subtracting your outstanding mortgage balance from your home's current market value. Increasing your home equity means you're building wealth and financial security, giving you more flexibility for future financial goals.

Accelerating Mortgage Paydown

The most direct way to increase equity is to reduce the debt against your home. While making your regular mortgage payments builds equity over time through amortization, you can speed up this process. Consider making extra principal-only payments whenever possible, even small ones. Another strategy is to switch to bi-weekly payments, which results in one extra full mortgage payment per year without feeling like a huge burden. You could also explore refinancing your mortgage to a shorter term, like a 15-year loan instead of a 30-year, though this will increase your monthly payment.

Smart Home Improvements and Maintenance

Not all home improvements are created equal when it comes to boosting equity. Focus on renovations that are known to have a good return on investment (ROI) and appeal to a broad range of potential buyers. Kitchen and bathroom remodels, enhancing curb appeal, and improving energy efficiency are often good bets. Crucially, consistent maintenance protects your home's value from deteriorating. Addressing issues like a leaky roof, outdated HVAC, or worn-out siding prevents problems that could significantly decrease your home's market value.

Leveraging Market Appreciation and Location

While you can't directly control the housing market, choosing a home in a desirable or growing area can naturally increase your equity over time as property values rise. Staying informed about local market trends, school district ratings, and community developments can give you an edge. Even if you didn't buy in a booming market, simply living in and maintaining your home allows general market appreciation to work in your favor over decades of ownership.

High-Return Home Improvements

Minor kitchen remodel
Minor bathroom remodel
Adding a wooden deck or patio
Entry door replacement
Attic insulation upgrade
Enhancing curb appeal (landscaping, fresh exterior paint)

Increasing your home equity is a fundamental way to build personal wealth. It provides a valuable asset you can borrow against in an emergency, use to fund major life events like college tuition or retirement, or leverage when you decide to sell and move. These strategies are relevant throughout your entire homeownership journey, offering pathways to greater financial freedom and stability.

Do all home improvements increase equity?

No. Only improvements that add more value than they cost, and that appeal to a broad range of buyers in your market, typically increase equity. Highly personalized or luxury upgrades may not recoup their cost.

Is it always better to pay down my mortgage faster?

It depends on your overall financial situation. If you have high-interest debt (like credit card debt), paying that off first usually makes more financial sense. If you have no other high-interest debt and an emergency fund, then accelerating mortgage payments can be a smart move.

How often should I get my home appraised to know my equity?

You don't need frequent formal appraisals. Online home value estimators and monitoring comparable sales in your neighborhood can give you a good idea. A formal appraisal is usually only necessary when refinancing, selling, or applying for a home equity loan.

Can my home equity decrease?

Yes. If local property values decline due to market downturns, or if you take out a home equity loan or line of credit (HELOC), your equity can decrease. Neglecting home maintenance can also lead to a drop in value.