What goes on whenever your home loan is more than your premises evaluation? A little advance payment may cause negative equity One of the ways negative equity takes place occurs when you purchase a house with a tiny deposit. In the event that you spend not as much as 20 percent down, you have to have mandatory standard insurance coverage. The fee because of this insurance coverage is a share centered on simply how much of a payment that is down are making. The smaller the advance payment, the larger the price when it comes to insurance coverage. For instance, you may purchase an apartment for $450,000 with a five percent advance payment ($22,500).