equity stripping

Equity stripping is a financial tactic where a lender or investor gradually reduces the value of a property or asset by charging high interest rates or fees on loans secured by that asset. Over time, this process diminishes the owner’s equity—the portion they truly own—by transferring it to the lender through accumulating debt or unfavorable terms. Essentially, it drains the owner’s stake in the property, often leaving them with little or no residual value, especially if they try to sell or refinance.