What is negative equity?

negative equity example

Negative equity means the current value of your home is less than the mortgage you have on it. This can happen for a number of reasons but it’s normally caused by falling property prices.

For example, if you bought a property for £180,000, with a mortgage for £150,000 and the property is now only worth £100,000, you would be in negative equity.

You may not know whether or not you’re in negative equity. The first thing to do is find out how much you owe on your mortgage. You can check on the internet bank, call us on 0800 30 20 11 or in branch.

You’ll then need to find out the value of your home. You can get a rough idea by using our house price index tool or by using an online property website or, to get a more accurate value, you can ask a local estate agent or surveyor but you may be charged for this.

What should I do if I'm in negative equity?

You don’t need to do anything. As long as you keep making your monthly mortgage payments you may soon be out of negative equity, either because the value of your home has risen, or because you’ve reduced the amount you owe to below the value of your home.

What if I want to move home?

If you’re an existing Nationwide borrower in negative equity and you need to move home we’ll consider your application as long as you:

  • have a need to move
  • are in permanent employment
  • can afford the new borrowing
  • agree your new mortgage will be on a capital repayment basis only.

As well as the eligibility criteria we’ll need to see your three most recent bank statements and proof of income. You can’t move to a new build, shared ownership or shared equity property and take your mortgage with you if you’re in negative equity.

If you’d like to apply, please make an appointment in branch.

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