Negative equity: homeowners and mortgage debt

12 June 2009

Figures from the Bank of England`s latest quarterly bulletin estimate that up to 1.1 million households were in negative equity at the end of the first quarter of 2009. This means that up to 11% of homeowners with a mortgage owed their lender more than their property was actually worth.

A debt expert for Think Money said, "Mortgage debt can be a huge concern for homeowners when they see the value of their property declining - especially people who have additional unsecured debts.

"Negative equity could be a real problem if they wished to sell or remortgage their property, or if they were counting on being able to free up some of the equity in their property.

"For people who aren`t planning to do any of these things, though, negative equity needn`t be an immediate problem - as long as they`re able to wait for house prices to rise again.

"Anyone worried about negative equity, or mortgage debt in general, should seek professional advice as soon as possible."

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Tags: mortgage, debt, mortgage debt, mortgage arrears, negative equity, homeowners, remortgage, free up equity, house price rise, wait for house prices to rise

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