Mythbuster: "My children will inherit my debt"

Will my kids inherit debt through my equity release?

No. With plans that meet the Equity Release Council standards, you’ll never owe more than the value of your home. 

All of the plans we recommend come with the no negative equity guarantee, meaning any debt you accrue through equity release can’t be passed on to your loved ones.

When you, or the last remaining applicant passes away or moves into long-term care, signalling the end of your equity release plan, your home will usually be sold and the sale proceeds will be used to repay the amount you owe. Any money left will go to your estate. You can explore more about how equity release fits into estate planning with us.

Taken directly from the Equity Release Council's website, your protection is as follows: “When your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more.”

If you want to repay your equity release plan early, you can. However, it’s worth noting that you may incur an early repayment charge. Your equity release adviser will discuss any early repayment charges applicable to the plan they recommend to you clearly before you commit to your plan.
 

What if I go into long-term care?

If you have a joint plan, and you or the other plan holder goes into long-term care, the other can continue to live in the property, and your plan would not usually be affected. However, if you both require long-term care, or you’re a single applicant and go into long-term care, the plan will end and your property will usually be sold to repay the amount you owe.

If you have any further concerns about passing on equity release debt to beneficiaries, we can talk you through it and answer any further questions you may have.

If you are considering equity release we recommend that you read through is it right for me?


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