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The shrinking value of your mortgage

24/10/2011

Never mind the shrinking value of your house because your mortgage is shrinking as well.

So whilst the value of your mortgage will never go up, unless you re mortgage your house, the chances are that in time, the value of your house will rise.  

Although every economic situation is different, in both the seventies and the nineties, it took property about seven years to recover value lost in the recessions of both those periods.

My own view is that we will be in for rather a longer wait this time around, but it will come. Therefore, for almost all borrowers, the margin between the higher value of your property and the lower value of your mortgage will only get bigger in time, so not such a gloomy picture after all.