noun, plural eq·ui·ties.
- Also called chancery.the application of the dictates of conscience or the principles of natural justice to the settlement of controversies.
- Also called chancery.a system of jurisprudence or a body of doctrines and rules developed in England and followed in the U.S., serving to supplement and remedy the limitations and the inflexibility of the common law.
- an equitable or legally valid right or claim.
- equity of redemption.
Origin of equity
It was not until the late 16th century that a new meaning—one that placed equity in the arena of law—emerged. Perhaps because many of the usages of equity involved legal disputes over rights and claims of ownership, by the turn of the 20th century, the word started being used in another sector: finance. It was at this point that terms such as “home equity” and “equity loan” became common finance terms. At the same time, equity started popping up in terms of stock and asset ownership.
In 1913, a small group of actors founded the labor union, Actors’ Equity Association—proof that the original sense of equity was still very much alive. This union, often referred to simply as “Equity” (with a capital E), fights for the rights of actors in the spirit of equity’s Latin roots.
- "Made a judge, and the judge of an adored woman, he found in his soul the equity of a judge as well as the inflexibility."-Honoré de Balzac transl. by Katharine Prescott Wormeley Farragus: Chief of the Dévorants (1895)
- "[H]ome equity borrowing has enormous disadvantages. Home, sweet home is the collateral. If you fall behind on payments, the bank could take it."-Mark Green, Nancy Youman The Consumer Bible: 1001 Ways to Shop Smart (1998)
- "Equity represents ownership in the firm and consists of retained profits and shares issued either privately or through a stock market."-Robert Y. Redlinger, Per Dannemand Andersen, Poul Erik Morthorst Wind Energy in the 21st Century (2002)
- "Equity insisted that striking actors be allowed to return to the positions they held at the time of the walkout."-Matthew Kennedy Marie Dressler: a A Biography (1999)
noun plural -ties
Word Origin for equity
early 14c., from Old French equite (13c.), from Latin aequitatem (nominative aequitas) "equality, conformity, symmetry, fairness," from aequus "even, just, equal" (see equal). As the name of a system of law, 1590s, from Roman naturalis aequitas, the general principles of justice which corrected or supplemented the legal codes.
In real estate, the financial value of someone's property over and above the amount the person owes on mortgages. For example, if you buy a house for $100,000, paying $20,000 down and borrowing $80,000, your equity in the house is $20,000. As you pay off the principal of the loan, your equity will rise.