Negative Equity |
| A situation where the purchaser of a property has taken out a mortgage and some time after the purchase, the value of the property falls below the mortgage amount. For example, consider a situation where the purchase price of a property is œ180,000, and it is bought with a deposit of œ10,000 and a mortgage of œ170,000. If the value of the property falls below œ170,000 and the mortgage holder has yet to repay any of the capital, he/she has negative equity in the property. |
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