Negative equity

Negative equity occurs when your mortgage borrowing exceeds the value of your property. It is a growing worry for many home owners, particularly in recent years when housing prices plumetted across the country.

Homeowners who fall into negative equity and are unable to pay their mortgage could face having their home put up for repossession. Some landlords using the buy-to-let scheme can also fall into negative equity if they do not receive enough rent to subsidise the amount of investment spent on purchasing the property.