Jargon Buster - Definition of Negative Equity

Please select your letter of choice below to see the list of terms:

Negative Equity

is where the value of a property drops to below the mortgage amount. This basically means that more money is owed on the house/property than what it's current value is.

For example:

Original value of property: £150,000

Deposit paid: £30,000

Mortgage taken: £120,000

If the value of the property drops to below £120,000 then there is negative equity for the borrower.

Please note that all definitions are intended for general guidance only. For official and current definitions you should always double check your policy wording.

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