What is the No Negative Equity Guarantee?

The No Negative Equity Guarantee (NNEG) is a mandatory consumer protection that applies to all regulated reverse mortgages in Australia issued after September 2012. It is one of the most important safeguards to understand.

In plain terms: you can never owe more than your home is worth.

How it works

With a reverse mortgage, interest compounds over time without regular repayments. In some scenarios - if you live in the home for many years, or if property values fall - the loan balance could theoretically exceed the property's market value. The NNEG ensures this can never leave you or your estate with a shortfall.

When the property is eventually sold and the loan is repaid:

  • If the sale proceeds are more than the loan balance: the remaining equity belongs to you or your estate
  • If the sale proceeds are less than the loan balance: the lender absorbs the difference - you owe nothing more

This protection is enshrined in the National Consumer Credit Protection Act 2009 and applies regardless of which lender or product you choose.

The Guaranteed Right of Occupancy

Alongside the NNEG, Australian law also provides a Guaranteed Right of Occupancy. You - and your partner, if named as a co-borrower - have the legal right to remain living in your home for as long as you choose. The lender cannot ask you to leave under any circumstances, even if the loan balance grows to equal the property's value.

What the NNEG does not mean

The guarantee protects you from owing more than your home is worth - but it does not prevent the loan balance from growing to equal your home's value over time. If that happens, there may be no equity remaining for your estate. This is why we always model long-term loan balance projections for every client, so you can see exactly how the balance is expected to grow relative to your property's estimated future value.

Why these protections matter

These two protections directly address the two concerns most people have when they first hear about reverse mortgages: "Could I end up in debt?" and "Could I lose my home?" Under Australian consumer credit law, the answer to both is no. All lenders on the Money at 60 panel are fully regulated and all their products include these protections as standard.

This page provides general information only. Individual product terms vary. Always read the loan contract carefully and obtain independent legal advice before signing. Money at 60 is a credit representative (CR 557838) of Invictus Group Pty Ltd (ACL 483078).