Equity is basically how much of your home you already own. At the start of 90% LVR home loans, that’s going to be 10% of its value. Negative equity happens if the value of your property falls over time instead of rising. That can result in you owing more than it’s worth. Negative equity is a risk all homeowners take, but it increases when you use a smaller deposit – because the amount the value needs to fall to reach negative territory lessens. With most homes, your equity rises as you make repayments and time passes.