Equity Release Financial Product Regulations
07 August 2019
The Equity Release Financial Product Regulations (LN 193 of 2019) were passed as a regulation under the Financial Institution Act on the 6th of August 2019. These provide for the creation of a new type of financial instrument through the release of equity locked in one’s home.
It consists of equity release credit agreements where the creditor grants on loan a lump sum, periodic payments or other forms of credit disbursement in return for a sum deriving from the future sale of a residential immovable property or a right relating to residential immovable property and will not seek repayment of the credit until the occurrence of the death of the consumer or his/her move to long-term care or any one or more other specified life events of the consumer as may be defined by the competent authority, unless the consumer breaches his contractual obligations which allows the creditor to terminate the credit agreement.
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