What is the definition of 'equity'?

Answer 1

An individual will consider that he is treated fairly if he perceives the ratio of his inputs to his outcomes to be equivalent to those around him. Thus, all else being equal, it would be acceptable for a more senior colleague to receive higher compensation, since the value of his experience (an input) is higher. Example: If you own a home that's worth $60,000, but you only owe $30,000 on the mortgage, your equity is $30,000. If you owe $40,000 on the mortgage, then your equity is $20,000.

Answer 2

Equity means even-handedness and justice.

In English judicial history it means a body of law developed by the Courts of Chancery which modified the law with a view to making it fairer. The same legal issue might have an answer according to Law and another according to Equity, which the judges arranged to coexist.

In mortgage law it means the value of a property less the amount of mortgage debt secured against it. In English law, defaulting on a mortgage meant the forfeiture of the property no matter how small the debt secured, but Equity said that the property owner should have every opportunity to recover his interest in the property.