Equity Release Negative Equity

Protect yourself against equity release negative equity...

With some equity release products, such as a roll-up mortgage whereby the interest is added onto your loan rather than repaid as and when it arises, you can get into negative equity if the level of the outstanding loan rises above the value of your property.

Will equity release negative equity affect me?

Because you do not repay the loan until your house is sold – either upon death or if you move into permanent full-time care – equity release negative equity may never affect you directly, but it could affect those you leave behind who might have to repay the difference.

However, most lifetime mortgages offer a 'no-negative-equity guarantee', particularly those companies which subscribe to the SHIP (Safe Home Income Plans) Code of Conduct, which is a promise that your beneficiaries will never have to repay more than the value of your home.

You should always check to make sure your mortgage has this feature so that equity release negative equity is never something or your family has to deal with.

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