Negative equity

To put it simply, negative equity occurs when the size of your mortgage is bigger than the value of your house.

This occurred in the early 90's after the last house price crash and people who bought leading up to the peak were left with negative equity for years to come.

An example of negative equity:

  • House is valued at £100,000
  • Mortgage on the property is £150,000
  • Amount of negative equity is £50,000

See also:-