Products which fully meet the Equity Release Council’s Product Standards are required to feature a “no negative equity guarantee”. Put simply, this guarantee means that you, or more specifically, your estate will never owe more than the property is worth when it is sold.
Under your equity release plan, you have the right to live in your home until you need to move into a smaller property (whereby the plan may be transferrable), or move into permanent care, or until death. Your property will be sold and the sale proceeds will be used to repay the money owed to the provider of your plan. Any money left over, at the end of your plan, will be paid to you or your beneficiaries, in accordance with your Will. In the unlikely event that the value of your house has decreased significantly, it is possible that it might not be worth enough to cover the amount which you owe. The “no negative equity guarantee” means that if this turns out to be the case, the remainder of the loan would be written off.