Direct answer
Worried about losing home equity? What recent buyers should know
New research from Boon Brokers found that 91% of 1,000 UK mortgage borrowers who bought within the past five years were concerned that their home equity could reduce. That finding measures how buyers feel, not whether their individual property is losing value or whether they are in negative equity.1
Home equity is broadly the property's current value minus the mortgage balance. Negative equity occurs when the amount owed on the mortgage is greater than the property's value. A lower estimate can reduce an equity cushion without removing it completely.3
Key points
- Concern about future equity is not evidence of a current financial loss.
- A lower property value only creates negative equity if it falls below the outstanding mortgage balance.
- Equity matters most when you need to sell, move, remortgage or raise further borrowing.
- A realistic value, current balance and deal end date provide a better plan than a national headline alone.
01
What the new research shows, and what it cannot show
Boon Brokers surveyed 1,000 UK homebuyers who had purchased with a mortgage during the previous five years. It found that 91% had some concern that housing-market changes could reduce their equity, while 47% were very or extremely concerned. Separately, 44% thought entering negative equity during their current mortgage term was likely.12
The same study found that 58% believed their property had increased in value since purchase and only 17% believed it had fallen. That contrast matters: the survey is a useful picture of buyer confidence, but it is not a forecast, a valuation or proof that most recent buyers face negative equity.1
A better response is to replace a broad worry with four facts: a reasonable current property estimate, the latest mortgage balance, the end date of the existing deal and what you expect to do with the home next.
02
Work out the equity position before reacting
Equity is the difference between the current value of the home and the amount still owed on the mortgage. If the property is worth £250,000 and the balance is £225,000, the illustrative equity is £25,000. If the accepted value falls to £237,500 while that balance remains unchanged, the equity falls to £12,500 but is still positive.3
Only when the property value falls below the amount owed does the example move into negative equity. Real balances change as repayments are made, and a lender or valuer may reach a different property value from an online estimate, so use current figures when making a decision.
| Property estimate | Mortgage balance | Illustrative equity | Loan-to-value |
|---|---|---|---|
| £250,000 | £225,000 | £25,000 | 90.0% |
| £237,500 | £225,000 | £12,500 | 94.7% |
| £220,000 | £225,000 | -£5,000 | 102.3% |
03
Why a house-price headline is not your valuation
The UK House Price Index tracks changes in residential property values using completed housing transactions. It is useful for understanding broad national, regional and local trends, but it does not value an individual property.4
Two homes in the same postcode can have different values because of their size, tenure, condition, layout, improvements and exact position. Recent comparable sales can add useful context, but the figure used in a mortgage decision is normally the value accepted through the lender's valuation process.
Online estimates can therefore be a starting point rather than a reason to make an immediate financial decision. If a sale or remortgage is approaching, use evidence that reflects the actual property and the purpose for which the value is needed.
04
When lower equity becomes a practical issue
MoneyHelper explains that negative equity can make it harder to move home or remortgage because a sale may not produce enough to repay the mortgage and a new lender may not be willing to lend at the required loan-to-value. Even before equity turns negative, a higher loan-to-value can narrow the products available.35
If you intend to remain in the home, can afford the payments and do not need to change the mortgage, a lower estimated value may have little immediate effect on day-to-day finances. MoneyHelper also notes that negative equity does not directly affect a credit score, although missed mortgage payments can.3
- Selling, because the sale proceeds must cover the secured borrowing and costs
- Moving, because available equity may form the deposit for the next home
- Remortgaging, because the accepted value changes the loan-to-value
- Borrowing more, because existing and proposed secured debt are considered together
05
A calm action plan for recent buyers
Start by requesting an up-to-date mortgage balance and checking when the current deal and any early repayment charge end. Then form a realistic value range using relevant evidence rather than selecting the highest available estimate.
If you are considering overpayments, check the mortgage terms first. MoneyHelper says overpaying can help reduce the balance, but charges may apply and it is important to keep enough accessible money for emergencies and higher-priority debts.3
For a deal ending soon, compare the current lender's product-transfer options with any remortgage routes for which the full case may qualify. If payments are becoming difficult, contact the lender early rather than waiting for an arrears problem to develop.35
- Confirm the current mortgage balance and any other secured borrowing
- Use a sensible property-value range, not one untested online figure
- Record the deal end date, follow-on rate and early repayment charge
- Set out whether you plan to stay, sell, move or remortgage
- Review the options early if the existing mortgage deal is approaching its end
06
The bigger lesson for future buyers
A home should be affordable without relying on short-term price growth. Before buying, compare the deposit and mortgage against the total cash left after completion, likely holding period, payment changes after the initial deal and the effect of a lower future valuation.
A larger deposit can create a wider equity cushion, but it should not come at the expense of essential buying costs or a sensible emergency reserve. The right balance depends on the household, property and mortgage rather than a universal percentage.
If you are worried about the equity in an existing home, an adviser can help organise the value, balance, loan-to-value and future plans before comparing mortgage routes. That conversation should begin with the facts, not a prediction about where house prices will go next.
Common questions
Questions answered
What is home equity?
Home equity is broadly the difference between the property's current value and the outstanding mortgage balance. Other secured borrowing and selling costs can also affect the amount left if the property is sold.
Is a fall in property value the same as negative equity?
No. A fall reduces equity, but negative equity only arises when the property is worth less than the amount owed on the mortgage.
Can I remortgage if I am in negative equity?
A remortgage to a new lender can be difficult because the loan exceeds the property value. Your existing lender may have a product-transfer option that does not require a new valuation, but availability and eligibility depend on its rules.
Does negative equity affect my credit score?
Negative equity does not directly affect a credit score. Missed or late mortgage payments can affect the credit record, so contact the lender promptly if affordability is becoming difficult.
Should I overpay my mortgage to build more equity?
Overpayments can reduce the balance, but first check any allowance or early repayment charge and retain appropriate emergency savings. Whether it is suitable depends on the mortgage terms and wider finances.
How can I check what my property is worth?
Use recent comparable sales and local market evidence to form a realistic range. For a mortgage, the relevant figure is normally the value accepted by the lender following its valuation process.
Evidence
Sources and review
Material factual claims were checked against the primary and public-interest sources below. Product criteria and the wider market can change after the review date.
- 1Negative Equity Concerns Among UK Homebuyers: 2026 Study
Boon Brokers. Survey methodology and findings on recent buyers' concerns, perceived equity and property values.
- 291% of recent homebuyers worry about losing home equity
The Intermediary. Independent trade-press reporting of the Boon Brokers research.
- 3Negative equity: what it means and what you can do about it
MoneyHelper. Definition, practical consequences, credit-file position and options for homeowners.
- 4About the UK House Price Index
HM Land Registry. Purpose and methodology of the official UK House Price Index.
- 5Remortgaging to cut costs
MoneyHelper. General considerations when comparing remortgage and existing-lender options.
Published 4 August 2026. Last reviewed 4 August 2026.