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Negative Equity

A situation where your mortgage balance is greater than the value of your home.

This can occur when you make a small down payment (e.g.  5%) and home prices drop considerably.

Negative equity is problematic for people who can’t meet their mortgage payments.  That’s because it eliminates the option of selling ones home to repay the mortgage in full.

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Last modified: April 18, 2010

Robert McLister is one of Canada’s best-known mortgage experts. A mortgage columnist for The Globe and Mail, interest rate analyst and editor of MortgageLogic.news, Rob has been covering Canada's mortgage market since 2007.

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