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The equity in your home increases when the value of your home goes up or the amount you owe goes down. Some people increase their equity by paying off their mortgage faster than required. Others increase their equity by increasing the value of the property. When you make improvements to your house yourself, without taking out a loan to pay for them, it's known as 'sweat equity.' By doing the work yourself, you're increasing the value of your home without incurring large costs. As the value of your home increases, and your mortgage remains stable, your equity goes up.