DEFINITION of 'Mortgage Equity Withdrawal - MEW'

The removal of equity from the value of a home through the use of a loan against the market value of the property. A mortgage equity withdrawal (MEW) reduces the real value of a property by the number of new liabilities against it.

BREAKING DOWN 'Mortgage Equity Withdrawal - MEW'

During times of economic boom and rising home prices, mortgage equity withdrawals are a common practice. If the value of the property increases at the same rate as the mortgage equity withdrawals, the real value of the home remains constant. Issues arise, as they did in the financial crisis of 2007-2009, where home prices decrease to below the value of the liabilities outstanding - this creates a negative real value of the property to the owner.

RELATED TERMS
  1. Home Equity

    The value of ownership built up in a home or property that represents ...
  2. Mortgage Equity Withdrawal

    The amount of equity that consumers withdraw from their homes ...
  3. Equity

    Equity is the value of an asset less the value of all liabilities ...
  4. Mortgage Constant

    A ratio between the annual amount of debt servicing to the total ...
  5. Negative Equity

    When the value of an asset falls below the outstanding balance ...
  6. Equity Takeout

    Taking money out of a property to use for a variety of purposes. ...
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