Home owners advised to use low rates to stave off negative equity

Home owners who have borrowed at a high LTV should consider increasing their mortgage payments to avoid negative equity, advises Fairinvestment.co.uk.

The finance portal carried out a survey with 2,000 home owners into LTV ratios.

It found that some 21% of respondents had borrowed at least 90% LTV, with 5% who had borrowed at LTVs between 101% and 125%.

Sharon Bratley, chartered financial planner at Fairinvestment.co.uk, says: “These home owners could now be at risk of negative equity as house prices continue to come down, particularly if they bought their house within the last three years.”

She adds: “As interest rates fall it could be advisable to those with a high mortgage LTV ratio to increase their mortgage payments, and therefore the equity they hold in their property, depending on their circumstances.”