Negative Equity

The difference between the value of your house and your mortgage, when the value is less than the mortgage outstanding. This is caused by a general fall in the market value of a mortgaged house. This can create difficulties for individuals who can no longer maintain the repayments on their mortgage as they will be unable to cover the full amount of the mortgage if they sell the house.

This is why lenders will generally not lend anymore than 90% LTV of the property to ensure this situation does not arise. It is also why lenders charge Higher Lending Charges on high LTV properties to cover them on any potential loses if the house is repossessed.

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COOKIES & PRIVACY

Negative Equity