What is the term for the value an owner has in a property that exceeds the mortgage debt?

The term for the value an owner has in a property that exceeds the mortgage debt is referred to as equity. Equity represents the portion of the property that the owner truly owns outright, without any claims from creditors. It is calculated by taking the current market value of the property and subtracting any outstanding mortgage balance or other liens on the property.

For instance, if a homeowner's property is valued at $300,000 and they have a mortgage balance of $200,000, their equity would be $100,000. Equity can increase over time as the property appreciates in value or as the mortgage balance decreases through regular payments. This concept is crucial for homeowners as it impacts their net worth and offers opportunities like home equity loans or lines of credit.

Other terms, like escrow and surplus, do not relate to this definition, as escrow typically refers to funds held by a third party in a transaction, and surplus implies an excess of something rather than ownership value in property.