This article is playful look at the origin, etymology, and psychology, of the word ‘equity’. The article is intended to be a humorous and poetic dig at the word that has become central to our discussions, and as a historical reference to deepen our understanding. Of course, one of the underlying primary goals we work towards on a daily basis is increasing your equity and building wealth through your various property strategies, and our debt reduction methods are central to this end.
If principal is the original sin and interest is the cost of desire, then equity is the fragile dream of redemption. It is the reward we chase, the mirage that promises something permanent in a world ruled by impermanence. In the pantheon of financial metaphors, equity is the closest we get to salvation — and yet, like salvation, it is a concept more spiritual than material, more aspirational than actual.
Equity, derived from the Latin aequitas, meaning fairness or justice, seems to offer balance to the borrowing soul. It is the portion of the home that is “yours,” the difference between what you owe and what your property is worth. It is what remains after the bank has taken its pound of flesh and interest has exhausted its appetite. But to think of equity as true possession is to mistake illusion for reality.
In practical terms, equity is an accounting entry — a figure in a spreadsheet, delicate and unstable. Its very existence depends on an external valuation of your home, a valuation itself subject to whimsy: the weather, the neighbours, the latest sale around the corner, the rise and fall of interest rates, geopolitical shifts, or the passing fancies of the market. One moment you are “ahead,” the next you are underwater. The equity you thought you built may not be equity at all — merely the temporary difference between what you believe and what the market permits you to believe.
And herein lies the great psychological fiction: equity seduces us into thinking we own something that is not fully ours. The home, that sacred domestic temple, is pledged — not only in paperwork but in ideology — to a system that will repossess it without remorse if the right payments are missed. One may have equity and still lose everything. Equity, therefore, is not a guarantee of ownership, but a conditional trust, an allowance granted to the borrower who behaves well.
Philosophically, equity is a story we tell ourselves to survive the weight of the loan. It is the counterbalance to the crushing awareness of debt, the candle flickering at the end of the tunnel. When the principal feels suffocating and the interest predatory, we look to equity as the measure of progress. But in doing so, we tether our sense of self-worth to an asset class. We come to believe that equity isn’t just in our home — it is in us. And so our value rises and falls with the appraisal.
What then does it mean to “have equity” in a home? It is to believe in the notion that ownership is earned gradually — that bricks and beams become yours only through prolonged submission to a financial schedule. You start with nothing and hope, over time, to own more. But this too is an abstraction. You can “own” 80% of a home and yet be unable to access it, leverage it, or liquidate it without a process that costs time, money, and further permission. Your equity is not liquid, nor fully available — it is more symbol than substance.
Equity also plays an essential role in the rituals of aspiration. It is the currency of social mobility, the key to future borrowing, the reason people speak of “getting on the ladder”, In truth, equity is the ladder — a slow, creaking climb out of debt and into legitimacy. To have equity is to be taken seriously. It is the credential that signals adulthood, responsibility, stability. It is, in many ways, a social performance. And like all performances, it is vulnerable to the shifting script of circumstance.
The cruelty of equity is that it can disappear through no fault of your own. A correction in the market, a downturn in the economy, a global crisis — and the equity you spent a decade cultivating vanishes. This is not ownership. This is volatility dressed in the costume of progress. And yet, we continue to worship at its altar, measuring our lives in the incremental ascension of value.
Equity promises freedom — “Once I have enough, I’ll be free” — and yet its pursuit so often prolongs the very bondage it claims to release us from. We borrow against it, invest it, redraw from it. We make it work, even when it should be resting. Equity becomes a servant to other financial dreams: renovations, investments, education, retirement. The myth of ownership is compounded by the reality of reinvestment. We rarely “own” outright. We just reroute.
Still, there is a poetic beauty to equity, despite its fragility. It reminds us that value can be built slowly, that permanence is at least partly achievable, that what is paid down is not lost but stored — latent, dormant, waiting. Equity is the long echo of repayment, the reward that accrues invisibly while we do the ordinary work of making payments, mowing lawns, repainting doors, living lives.
And so, when the debt is finally gone, when the interest is silenced and the principal conquered, what remains is equity — not just in the home, but in the self. The equity of endurance. The equity of character. The equity of having stayed.
True equity, in this sense, is not what the market says your home is worth. It is what you have become in the process of paying for it.
