What is home equity?

A. Home equity is the amount of interest paid on a mortgage during the lifetime of the loan.
B. Home equity and principal are two types of mortgages that someone might select when refinancing a home.
C. Home equity creates a line of credit that can then be deducted on federal tax returns.
D. Home equity is the difference between the market value of a house and the amount owed on the mortgage.

D. Home equity is the difference between the market value of a house and the amount owed on the mortgage.