What is equity of redemption?

Equity of redemption is the homeowner's right to pay off the entire outstanding loan balance, including costs and interest, and retain ownership of the property after a foreclosure has begun but before the law day passes. This right exists as long as title has not vested absolute in the lender, meaning the foreclosure sale has not yet been finalized and recorded.

Under Connecticut law, this right is fundamental to foreclosure defense. Once a homeowner receives notice of default and foreclosure, they retain the ability to stop the process by satisfying the full debt through the law day (the date set for the foreclosure sale). After that date, if the sale proceeds and title transfers to the lender or purchaser, equity of redemption is extinguished.

The equity of redemption differs from the statutory right of redemption, which some states grant after a sale closes. Connecticut recognizes equity of redemption as the primary protection for homeowners facing foreclosure. This right makes it possible for homeowners to avoid losing their property and to preserve their equity, provided they can obtain the funds to pay the debt in full before the deadline.

Understanding this right is critical in foreclosure cases. Homeowners should work with an attorney who can identify redemption opportunities and advise on foreclosure defense strategies to exercise this right before it expires.