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.
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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