Thank you very much and above examples. I understand the concept now. Just 1 more question if my property was $300,000 and deposit was 20% and I sold for $320,000 would that mean I would of only get back $80,000 in total meaning I only made a $20000 profit? And my remaining loan would be included in that sale?

Thanks so much I am trying hard to get this

ok I am still confused, I have questions:

1. So if I purchase a $300,000 property and have a 20% deposit is that $60,000 in equity already??? 

2. So than I take out a loan of $240,000 over 25 years. If my loan was able to make extra repayments and I was suddenly handed $100,000 could I just throw the $100,000 in that loan amount which will decrease a big chunk out of the loan to $140,000. Would that mean I would just have to pay interest on the remaining $140,000 or from the overall $240,000 I borrowed??? 

3. If my property in one year increased to $320,000 and I have paid off about $15,000 of the principle which the remaining loan would be $225,000 I understand that if I sell it would cover that part but what happens to the rest of my loan ? the interest ? 

I am so confused why don't they teach us this at school!!!!!!!!!!!!! I am sorry if this is a very dumb question but I am clueless I need a step by step on how things work.