Negative equity traps up to 300,000

UP TO 300,000 house owners could be trapped in negative equity resulting in them being unable to change mortgage provider to avail of a cheaper loan.

The days of banks scrambling to encourage homeowners to switch mortgages are long gone as mortgage holders, who purchased their homes at high loan-to-value ratios during the property boom, are likely to be trapped with their existing loan providers for many years to come.

This is according to director of the Irish Mortgage Corporation, Frank Conway, who said that in mid-2006 around 35% of all first-time buyers purchased their homes using 100% financing.