The difference between the appraised value of your home and the unpaid balance of your current mortgage makes up your home equity. You can grow your equity by paying down your mortgage, but it can also grow on its own if the appraised market value of your home increases over time. For example, if your home is worth $350,000 and you still owe $250,000 on your current mortgage, you would have built up $100,000 in home equity.