What Happens to Equity Release When I Die?

The repayment trigger

A lifetime mortgage becomes repayable when one of two events occurs: your death, or your permanent move into long-term care. These are the standard repayment triggers for all lifetime mortgage products.

For a sole applicant, death is the most common trigger. For a joint plan (taken by a couple), the loan is not repayable until the second borrower has also died or entered permanent care — the surviving partner continues to live in the property on exactly the same terms as before.

Temporary stays in hospital or short-term respite care do not trigger repayment. The trigger is specifically permanent entry into residential or nursing care.

The 12-month repayment window

Once the repayment trigger occurs, most lenders allow the estate up to 12 months to arrange repayment. This is a standard feature of Equity Release Council-approved products and gives executors time to deal with probate, obtain valuations, and complete a property sale without being forced into a rushed transaction.

Interest continues to accrue during this period. The outstanding loan balance will therefore be slightly higher at the point of sale than it was at the date of death, but lenders do not charge additional penalties for the time taken to complete the sale within the 12-month window.

If the property has not been sold within 12 months, lenders will typically agree extensions in genuine cases — for example, where probate has been delayed or the property market is slow. Communication with the lender is important throughout this process.

What if the loan exceeds the property value?

The no-negative-equity guarantee, which is a mandatory feature of all Equity Release Council-approved products, protects the estate in precisely this situation. If the outstanding loan balance — including all accrued compound interest — exceeds the amount the property sells for, the lender absorbs the shortfall. Your estate owes nothing beyond the sale proceeds.

This guarantee means that no matter how long the plan has been running or how much interest has compounded, beneficiaries will not be left with a debt to pay. To learn more, see: What is a no-negative-equity guarantee?

Joint plans — what happens when one partner dies

On a joint lifetime mortgage, the death of one partner does not trigger repayment. The surviving borrower continues to live in the property under the same plan terms. The loan remains outstanding and interest continues to accrue, but the surviving partner has full security of tenure for the rest of their life or until they move into long-term care.

Only when the last surviving borrower dies or enters permanent care does repayment become due. At that point, the 12-month repayment window begins and the process described above applies.

For more detail on joint equity release plans, see: Can couples get equity release together?

What your executors need to do

When the repayment trigger occurs, the practical steps for your executors or next of kin are:

1. Notify the lender — inform the lender of the death or care entry as soon as reasonably possible. The lender will confirm the outstanding balance and the repayment process.
2. Obtain probate — if you have a will, your executor applies for a grant of probate. This authorises them to deal with your estate, including the property.
3. Arrange a valuation and sale — the property is typically sold on the open market. In some cases, beneficiaries may wish to retain the property by repaying the loan from other estate funds or by taking out a new mortgage.
4. Repay the loan from sale proceeds — the lender is repaid from the proceeds of the sale. Any surplus after repaying the outstanding loan and accrued interest is distributed to the beneficiaries of the estate.

For a broader understanding of how equity release affects your estate and inheritance, see our full guide: Equity Release and Inheritance.

Equity release and probate

Probate is the legal process that gives your executor authority to deal with your estate. For most estates with a property, a grant of probate (or in Scotland, confirmation) is required before the property can be sold. Without it, the executor cannot transfer ownership or complete a sale.

The 12-month repayment window your lender allows runs from the date of death — not from the date of grant of probate. In practice this means your executor should notify the lender promptly and begin the probate application as soon as possible, so the time taken to obtain the grant does not eat unnecessarily into the repayment window.

Probate currently takes an average of 16 weeks from application in England and Wales, though complex estates or disputed wills can take considerably longer. If probate delays look likely to push beyond the 12-month window, contact the lender early — most will agree an extension where the delay is genuine and well-documented.

During the probate period and while the property is being sold, interest continues to accrue on the outstanding loan balance. This is normal and expected — lenders do not apply penalty charges during this period as long as the estate is actively progressing the sale within the agreed window.

What if the family wants to keep the property?

Beneficiaries are not required to sell the property to repay the equity release loan. If someone in the family wants to retain the property — for example, to live in it or keep it as an investment — they can repay the outstanding loan balance from other sources: their own savings, a new mortgage, or funds from other parts of the estate.

This requires the new owner to take on the title of the property and arrange repayment of the lifetime mortgage simultaneously. A solicitor experienced in later-life lending can manage this process. It is more complex than a straightforward sale, but it is a recognised route and lenders are accustomed to it.

If the family intends to explore this option, it is worth discussing it with the lender early in the process rather than close to the end of the repayment window.

Notifying the lender — what to say and when

The first practical step after a death is to contact the equity release lender directly. Most lenders have a dedicated bereavement team. You will need to provide:

• The policy or plan reference number (found in the original equity release documentation)
• A certified copy of the death certificate
• Contact details for the executor or next of kin

The lender will then write to the executor confirming the outstanding balance, the applicable interest rate, and the repayment process. They will also confirm the 12-month repayment window start date. Keep all correspondence from the lender — it will be needed by the solicitor managing the estate.

If the original policy documents cannot be located, the lender can still be traced. Check the Land Registry title for a registered charge — this will show the lender's name. The Equity Release Council also maintains records that can help identify the provider.