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Finance
Negative Equity
When the value of an asset falls below the amount still owed on the loan used to buy it.
Negative equity is common after housing crashes. It makes it hard to sell or remortgage. Lenders sometimes offer help-to-stay schemes, but negative equity can trap owners for years until prices recover.
It's owing more on your car than the car is actually worth — you're underwater.
Real world: Someone buys a house for £300,000 with a £280,000 mortgage. If house prices drop and it's now worth £250,000, they have negative equity of £30,000.
💡 Negative equity turns an asset into a financial burden until the value catches up.