The no-negative-equity guarantee means your estate can never owe more than the property is worth. This sets out the Equity Release Council's exact wording, the two conditions inside it, and the thing it does not do.
It is the reason no debt can pass to your family. It is not a promise that anything will be left, and those are very different things.
Equity release may involve a lifetime mortgage, secured against your property, or a home reversion plan. It will reduce the value of your estate and impact funding long-term care.
The Equity Release Council requires its members' products to carry it, in these words: "The product must have a NNEG so that, provided the secured property is sold for the best price reasonably obtainable and the terms and conditions of the loan have been met, the borrower or estate will never owe more than the property is worth, after deduction of reasonable sales costs."
Read the middle of that sentence rather than the end of it. There are two conditions attached, and almost every summary you will see elsewhere drops both.
It caps the debt at what the house sells for. It says nothing whatsoever about what is left over, and the difference between those two things is the inheritance.
See what is left, as a figure →The property has to be sold for "the best price reasonably obtainable". An estate that sells the house cheaply to a relative is not doing that, and the guarantee is written to say so.
What the executors have to do →The loan's terms and conditions have to have been met. Insurance lapsing or the property falling into disrepair are the usual ways that goes wrong, and both are avoidable.
The Council requires it of members. A provider outside the Council has not committed to it, which is the entire reason checking membership is worth two minutes.
How to check membership →Where the debt exceeds the sale price, the difference is written off. Your family does not inherit a debt and cannot be asked to make it up.
The risks, set out plainly →Whether any particular plan carries it, and on what terms. Check the offer document and check the provider is a Council member: those are the two things that decide it, and neither is something we can confirm for you.
Equity release may involve a lifetime mortgage, secured against your property, or a home reversion plan. It will reduce the value of your estate and impact funding long-term care.
Is this provider an Equity Release Council member?
The guarantee is their standard. Outside the Council it has not been promised.
What exactly must I keep up for the terms to be met?
Insurance and repair are the usual answers. Worth knowing rather than assuming.
How would a sale to a family member be treated?
A solicitor question, and it turns on "best price reasonably obtainable".
What is likely to be left, rather than what is capped?
The question the guarantee does not answer, and the one your family will ask.
Short answers to the things that come up most. None of it is advice, and every figure on this page carries its source.
That no debt can pass to your family. Whatever the debt has grown to, it cannot exceed what the property sells for. It is not a promise that anything will be left, and those are very different things.
Two, and almost every summary elsewhere drops both. The Council wording requires that the property is sold for the best price reasonably obtainable, and that the terms and conditions of the plan have been met.
It is required of Equity Release Council members. Those are the standards of a trade body rather than legislation, so a provider that is not a member has made no such commitment.
No, and that is the most common misunderstanding of it. It stops a debt passing to your family. It does nothing about how much of the property value the debt has consumed by then.
Equity release may involve a lifetime mortgage, secured against your property, or a home reversion plan. It will reduce the value of your estate and impact funding long-term care.
One qualified equity release adviser. They will go through your figures and tell you if there is a better answer. It costs nothing and commits you to nothing.
Google Analytics, Microsoft Clarity and Vimeo. Say no and none of them loads. What each one stores, and what Microsoft use theirs for.