Situation 8 of 10
When you owe more than your house is worth
Negative equity traps people, because no normal sale clears the loan. But trapped doesn't mean out of options.
“I don't have to move yet.”
How to improve it
- Staying put is often the cheapest option. Every payment shrinks the gap a little.
- If you can, overpay. Most mortgages let you pay off a bit extra each year without a fee. Check yours.
- Look at your mortgage deal's end date. Your lender may still offer you a new rate even in negative equity.
“I need to move, but a sale won't clear the loan.”
How to improve it
- Ask your lender for permission to let the house, so the rent covers the mortgage while values recover.
- Ask whether they have options for customers in negative equity who need to move.
- A lease option can pay closer to full price over time. Only with your own solicitor's advice.
“I'm also struggling to keep up the payments.”
How to improve it
- This is the hardest situation, so get free debt advice first, from StepChange or Citizens Advice.
- Some lenders will agree to a sale for less than you owe. Any shortfall is usually still a debt, so agree how you'll repay it in writing.
- Be very wary of anyone promising to make the problem disappear.
General guidance only. Speak to your lender and an independent adviser before deciding.
Other situations
- Your house isn't selling and nothing's happening
- Your house sale has fallen through
- Selling a house you've inherited
- Selling a house that needs work
- Selling a house during separation or divorce
- Selling a house with tenants in
- Behind on the mortgage
- Selling your house when you're relocating
- Selling a parent's house to pay for care