stars-five-icons

Open until 8pm GMT     View office hours

Negative Equity

Negative equity

Equity refers to the value of the share in your home that you own.

 

Negative equity means that you owe more on your mortgage that your home is worth. This can happen if your house has dropped in value, interest rates have risen significantly or if you’ve had trouble making mortgage payments.

 

If you are not planning to sell your home anytime soon, negative equity should not necessarily be a big concern, provided you can still make your payments.

 

However, if you need to sell your home, negative equity can mean the proceeds from the sale are not enough to pay off the mortgage and you may be left with a shortfall.

 

For example:

Your home is worth is £150,000

You owe £180,000 on your mortgage

That’s negative equity of £30,000

 

It’s important to remember too, that if the value of your home increases, you may no longer be in negative equity.

 

You can ask a local estate agent for a free valuation of your home and calculate that against your mortgage value to determine any shortfall. We advise that you get more than one valuation to gain a truer reflection of your property’s value.

 

If your home is in negative equity, there are two things you may be able to do to tackle it:

  • Increase your monthly repayments, provided it doesn’t stretch your budget
  • Pay a lump sum to reduce the deficit if you can afford to

 

Speak to your lender before doing either of these things to see if there are any early repayment penalties.

Can't find your answer?
Complete the form below to get in touch!



I agree to be contacted by the Creditfix group by phone, email or SMS. See our Privacy Policy for more information.

Do you qualify to reduce your debt?

Take our quiz

Creditfix have provided an excellent service during a very stressful time. They were helpful, considerate and relieved all stress. Can't recommend them enough if you're struggling with debt.

View case studies

What our customers say about us Trustpilot Logo

People Helped

Creditfix has helped over 92,000 people with their debts

Trustpilot Score

Excellent rating on Trustpilot with a score of 9.4 out of 10

Combined Experience

Our Insolvency Practitioners have over 70 years’ combined experience

GLASGOW
4 West Regent Street
Glasgow
G2 1RW

MANCHESTER
Lowry Mill Lees Street
Pendlebury
Swinton
M27 6DB

CARLISLE
Unit 50. Carlisle Enterprise Centre
James Street
Carlisle
CA2 5BB

[contact-form-7 id="5661" title="Exit Intent"]




Existing Customer
New Enquiry