The big danger for those who bought property at record prices is that any major price decline might mean your home is valued lower than it was for the last loan.

“This is likely to create a cohort of ‘mortgage prisoners’, last seen in the depressed housing market of the early 1990s,” says Vince Scully, a mortgage broker at Life Sherpa. Borrowers whose home has fallen in value, or whose income has fallen, or where interest rate rises mean they no longer qualify for a new loan of the same size as the one they have, might be “trapped in their existing loan”, he says.

“If this is you, then your only way to get a better deal is to try negotiating with your lender. They will do their own analysis and may assess that you have little choice, making it less likely you would be successful. [But] asking for a discharge form may convince them that you do have a choice”.

2. Liquidate assets

You could sell an investment property or other asset – if you have any. Used car prices are soaring, so it is a good time to sell that second car.

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There are also shared equity, reverse mortgage or wealth-release products traditionally targeted at older homeowners who are cash poor but asset rich. However, these types of deals could become more common for other types of borrowers.

3. Move or rent out a room

Renting a property might mean you do not have to sell it.

You might be able to negative-gear your home while you live elsewhere as a “rent-vester”. However, in this scenario, you still might have to pay land tax, a more expensive investment loan, and capital gains tax, if you eventually sell. It always pays to have a professional financial adviser crunch the numbers for you.

The “nuclear option” would be to move out and sell.

Some people will have little choice. Many of those may sell for less than they bought their property – and find themselves owing their lender the difference.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Joel Gibson is the author of Kill Bills. Catch his money saving segments on Nine Radio, TODAY and on Twitter @joelgibson.