The survey of 1,000 mortgage holders found that 24% were most concerned about entering negative equity, while 14% cited falling property values.
The findings suggest the immediate pressure of monthly mortgage costs is sitting alongside a deeper concern about falling house prices.
Nearly half of respondents said they were either extremely concerned or very concerned that market changes could reduce the equity in their home.
Gerard Boon, managing director of Boon Brokers, said exclusively to Mortgage Solutions: “Negative equity has become an increasingly prominent talking point, but one of the most interesting findings from this research is the contrast between current confidence and future expectations.
“Most recent homebuyers believe their property has increased in value, yet many still worry about what could happen to their housing equity over the lifetime of their mortgage.
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“While this may reflect a degree of optimism or bias about personal property values, the research clearly underlines that confidence today simply does not translate into confidence about the future. After several years of changing interest rates and market volatility, borrowers appear to be thinking further ahead than ever before.”
Risk of negative equity more likely than not
When asked directly about the risk of negative equity during their current mortgage term, 44% said it was likely, while 26% said it was unlikely. A further 31% were unsure.
Mortgage uncertainty has been prominent over the past year as repayments have risen and house price expectations have weakened.
However, most homeowners still believed their property had gained value since purchase, as 58% said their home had increased in value.
Negative equity concern was strongest among 25-34-year-olds, with 31% naming it as their top concern.
Younger were also more likely to see negative equity as a real risk, with 56% of 25-34-year-olds saying entering negative equity during their mortgage term was likely.
Mortgage repayment fears were especially prominent among those aged 45-54, of whom 42% named higher repayments as their biggest concern – the highest of any age group.
Regional results suggest the pressure is uneven. In central England, 36% said entering negative equity was their main concern, while 26% said higher mortgage repayments were their top concern.
Mortgage repayment worries were also high across several regions. Higher repayments were the biggest concern in Northern England, where 36% named them as their main worry.
Overall, the data showed homeowners are not only worried about the possibility of negative equity, but also about the mortgage pressures that could make that risk harder to manage.
