Extra protection against early repayment charges
Written in line with our editorial policy.
The Equity Release Council has updated its consumer protections, now adding a sixth product standard. There’s also a new Consumer Charter that outlines what customers can expect from Council members.
Following industry consultation and input from eight working groups, the Council says that the revamp of its consumer protections is focused on making its product standards clearer and more accessible.
As before, the product standards set out how the Council expects all of its members (including advisers and product providers) to support customers. The standards now look like this:
- Lifetime mortgage rates must be fixed for each release. If variable, the rate must be capped for the life of the loan.
- You retain the right to live in your property until the last surviving homeowner moves into long-term care or passes away.
- You have the right to move home and transfer your plan to another property, providing your new home meets your provider’s lending criteria.
- All plans must offer the ‘no negative equity guarantee’ to ensure that when your home is sold when your plan comes to an end, you’ll never owe more than the value of your home.
- You have the right to make penalty-free payments, subject to lending criteria.
- NEW FROM 6 MAY 2025: If you move permanently into long-term care, whether in a care home or with relatives providing care, any early repayment charge will be waived by your lender. This is upon receipt of a medical practitioner’s certificate and subject to the terms and conditions of the loan being met.
The new product standard builds on a previous commitment to early repayment charges being waived if a customer moves into care in a formal setting such as a care home. This is now confirmed as a product standard, and is expanded to ensure that the early repayment charge is also waived if the customer moves in with relatives to receive care.
