# Deferred payment agreements: using your home to pay care fees later > Family & care · Last updated 25 September 2026 Canonical HTML: https://moneyguide.org.uk/family-life/deferred-payment-agreements/ Markdown mirror: https://moneyguide.org.uk/family-life/deferred-payment-agreements.md ## Quick answer A deferred payment agreement lets the council pay your care home fees and recover the money later, usually when your home is sold or from your estate. In England, councils must offer one if your savings outside your home are £23,250 or less. Interest can be charged, capped at 4.65% a year from 1 July 2026. ## Who should skip this Skip this if your home is already disregarded, for example because your partner or a relative aged 60 or over still lives there: its value isn't counted, so you won't need a DPA. For the wider means test, see our [care home funding guide](/family-life/care-home-funding-options/). If most of your money is tied up in your home, a deferred payment agreement (DPA) means you don't have to sell it straight away, or at all in your lifetime, to pay care home fees. It's a loan secured on your home, with interest and admin charges, so it's worth understanding the terms before you sign. This guide covers who qualifies, how the interest cap is set, what happens on sale or death, the alternatives, and the rules in Wales, Scotland and Northern Ireland. ## Key facts - In England a council must offer a DPA if you need a care home, have £23,250 or less outside your home, your home isn't disregarded and it can take a first legal charge - The maximum interest rate is the OBR's gilt rate plus 0.15%, reset every 1 January and 1 July: 4.65% for July to December 2026 - You can defer up to 90% of your home's value, minus £14,250 and any mortgage - You can keep up to £144 a week of your income, for example to insure and maintain the home - The debt is due when the home is sold, or 90 days after death in England and Wales, and interest runs until it's repaid - Scottish DPAs are interest-free until 56 days after death; Welsh councils must offer one if your capital outside the home is £50,000 or less ## What is a deferred payment agreement? A DPA is an agreement with the council that delays paying some or all of your care home fees until later. The [Care Act statutory guidance](https://www.gov.uk/government/publications/care-act-statutory-guidance/care-and-support-statutory-guidance) says DPAs are designed to stop people being forced to sell their home in their lifetime to pay for care. The council secures the debt with a legal charge on your home, and the money is repaid when you or someone else pays it off, when the home is sold, or from your estate after death. In the traditional type, the council pays the care home and defers what you owe it; in the loan type, you pay the home and the council lends you the cost in instalments. Some people use a DPA as a bridging loan while they sell the home when it suits them; others keep it until death. ## Who qualifies for a deferred payment agreement in England? A council must offer a DPA if, when you apply, all of these apply: you're ordinarily resident in its area (or it's meeting your needs); your needs are to be met in a care home; your capital, not counting your home, is £23,250 or less; your home isn't disregarded in the means test; and the council can secure a first legal charge on the home. This applies whether the council arranges your care or you arrange it yourself. Councils can offer DPAs more widely, for example if you're just over £23,250. They can refuse even if you qualify if they can't get a first charge, if you want the DPA to fund a top-up (though they should still offer a sustainable amount), or if you won't accept terms such as insuring and maintaining the property. For a jointly owned home, the other owner must agree to the charge. The council should aim to have the agreement in place by the end of the 12-week property disregard, which starts when you first move into a care home permanently, and should explain the interest, charges and how the agreement ends before you sign. Consider independent legal or financial advice, and if you can't manage your own affairs, someone with a [lasting power of attorney](/family-life/lasting-power-of-attorney/) or a deputy can apply for you. ## How much can you defer? The total you can defer is capped by an 'equity limit': 90% of the home's value, minus £14,250, minus any mortgage or other debt secured on it ahead of the council's charge. The council must value the home, and you can ask for an independent valuation too. It should revalue the home when the amount deferred reaches half its value, review the arrangement with you at around 70%, and give you 30 days' written notice before you're likely to reach the limit. Councils can ask you to pay part of the fees from your income, but you have the right to keep up to £144 a week, the 'disposable income allowance', for things like insuring and maintaining the home. You can choose to keep less, which means you defer less and owe less. If you rent out the home, the council should let you keep a percentage of the rent. Councils must let you defer at least your core care costs; deferring a top-up for a more expensive home is at their discretion. ## How do interest and admin charges work? Councils may charge compound interest on the amount deferred, including any admin charges added to it, but must tell you before the agreement whether they will and at what rate. The rate can't exceed a national maximum set by the [Care and Support (Deferred Payment) Regulations 2014](https://www.legislation.gov.uk/uksi/2014/2671/regulation/9): the weighted average interest rate on conventional gilts for the relevant financial year, taken from the latest Office for Budget Responsibility (OBR) forecast published before the period starts, plus 0.15%. It resets every 1 January and 1 July, and councils must apply a change to existing agreements unless they already charge less. For 1 July to 31 December 2026, the OBR's [March 2026 Economic and fiscal outlook](https://assets.publishing.service.gov.uk/media/69a6d7b62e1f4fbda4252208/economic-and-fiscal-outlook-march-2026-web-accessible.pdf) gives a market gilt rate of 4.5% for 2026-27, so the maximum is 4.5% + 0.15% = 4.65%. Essex and West Sussex county councils both publish 4.65% for this period. The next reset is due on 1 January 2027. Interest keeps building up after you reach the equity limit and after death, until the debt is repaid. Admin charges must be reasonable and no more than the council's actual costs, such as Land Registry fees, valuations and staff time, and councils should publish a list. For example, Essex County Council lists a £721 set-up fee, £350 for a property valuation if needed and £10.80 a week, while West Sussex County Council lists £450 to set up and £144 a year (both checked on 25 September 2026). Compare the total cost, not just the interest rate. ## Worked example: deferring against a £250,000 home in England Suppose a single person moving permanently into a care home owns a home worth £250,000 with no mortgage and has £15,000 in savings, so they're under the £23,250 test. Their equity limit is 90% of £250,000 = £225,000, minus £14,250 = £210,750. That leaves £39,250 of the home's value that can't be deferred against. Their income is the full new State Pension of £241.30 a week (2026/27). The council can ask for the part above the £144 disposable income allowance, so up to £241.30 − £144 = £97.30 a week from income, with the rest of the fee deferred. If £40,000 had been deferred and the rate stayed at 4.65% with interest added once a year, the interest would be £40,000 × 4.65% = £1,860 in the first year and £41,860 × 4.65% = £1,946.49 in the second: £3,806.49 over two years. In practice the rate can change every six months, and your agreement says how often interest is compounded. *Worked example: key numbers for a £250,000 home in England (rates from 1 July 2026)* | Item | Calculation | Result | | --- | --- | --- | | Equity limit | (£250,000 × 90%) − £14,250 − £0 mortgage | £210,750 | | Value that can't be deferred against | £250,000 − £210,750 | £39,250 | | Most the council can take from income each week | £241.30 State Pension − £144 disposable income allowance | £97.30 | | Maximum interest rate, 1 July to 31 December 2026 | 4.5% OBR gilt rate + 0.15% | 4.65% | | Interest on £40,000 over 2 years at 4.65%, added yearly | £1,860.00 + £1,946.49 | £3,806.49 | ## What happens when the home is sold or you die? A DPA ends in one of three ways: you, or someone for you, repay the full amount at any time; the home is sold and the council is repaid; or you die and the debt is repaid from your estate. Whichever way it ends, the full amount is due, including deferred fees, interest and admin charges. The council must give a full breakdown of how the amount was worked out, and should confirm the agreement has ended and its charge on the home has been removed. If you sell, the amount due comes out of the proceeds. If you die, the debt falls due 90 days after death, and interest runs until it's paid. Family can repay from other money to keep the home, and the council must accept that if it covers the full amount. If, after 90 days, the sale isn't progressing and the council has tried to resolve things, it can take legal action to recover the debt. Executors should contact the council early; our guide to the [probate process](/family-life/probate-process/) explains their role. ## What are the alternatives to a deferred payment agreement? Selling the home is the simplest route, and the 12-week property disregard gives time to decide. Renting it out can help cover fees: the statutory guidance says councils should give information about letting, and under a DPA should let you keep part of the rent. Being a landlord brings legal duties, such as [protecting a tenant's deposit](/mortgages/landlord-deposit-protection/). Equity release, regulated by the Financial Conduct Authority, raises money from your home through a lifetime mortgage or by selling part or all of it to a provider (a home reversion plan). Under FCA rules, firms selling equity release must give advice, and can only sell without it in limited cases, such as when you've rejected the advice given. The adviser must weigh the effect on means-tested benefits, other ways of raising money such as grants, your wishes for your estate and your health and life expectancy. The FCA's standard lifetime mortgage illustration says that if you move into long-term care you'll usually have to repay the lender from the sale of your home, so check how a plan would work if care is likely. See [what equity release is](/answers/what-is-equity-release/) and [how it can affect benefits](/answers/does-equity-release-affect-benefits/). Before moving money or property to family, read about [deprivation of assets](/family-life/care-home-fees-and-deprivation-of-assets/): giving away assets to avoid care charges can be treated as if you still own them. ## How do deferred payments work in Wales, Scotland and Northern Ireland? Welsh councils must offer a DPA if you're to live in a care home, you'll pay a charge the council has assessed, your home isn't disregarded, your capital outside the home is within the £50,000 capital limit and your income isn't enough to cover the charge. The Welsh regulations use the same interest cap formula, gilt rate plus 0.15%, so the cap is also 4.65% from 1 July 2026. The debt is due on sale or 90 days after death, or later if the council allows. In Scotland, councils may enter into DPAs but aren't required to unless Scottish Ministers direct them to. The debt is secured by a standard security and no interest accrues until 56 days after death or the date you end the agreement; after that, interest is charged at a rate the council sets under Ministers' directions. Care Information Scotland notes that many councils use charging orders instead. We couldn't find a statutory deferred payment scheme for Northern Ireland on nidirect or in the Department of Health's charging guide, although the guide refers to trusts placing a charge on a permanent resident's interest in their former home. Ask your HSC trust how it deals with fees when your money is tied up in property. *Deferred payment rules by nation (checked 25 September 2026)* | Nation | Must the council offer one? | Capital limit outside the home | Interest | When it's repayable | | --- | --- | --- | --- | --- | | England | Yes, if you meet the criteria | £23,250 | Up to gilt rate + 0.15% (4.65% from 1 July 2026) | On sale, or 90 days after death | | Wales | Yes, if you meet the criteria | £50,000 | Up to gilt rate + 0.15% (4.65% from 1 July 2026) | On sale, or 90 days after death (or later if the council allows) | | Scotland | No, the council decides | Set by the council's scheme | None until 56 days after death or termination, then a council-set rate | 56 days after death, or the date you end it | | Northern Ireland | No statutory scheme found | Not published | Not published | Ask your HSC trust | ## Frequently asked questions ### Will the council make me sell my home to pay for a care home? Not if you have a deferred payment agreement. In England, councils must offer one to people who qualify, and it's designed so you don't have to sell your home in your lifetime. The home may be sold after death to repay the debt, unless your family repays it another way. ### Can my family pay off a deferred payment so they can keep the house? Yes. The debt can be repaid at any time by you or someone on your behalf, and after death the council must accept payment from another source if it covers the full amount, including interest and charges. It then removes its charge on the property. ### Is the interest rate on a deferred payment agreement fixed? No. The maximum changes every 1 January and 1 July, based on the gilt rate in the latest Office for Budget Responsibility forecast plus 0.15%. It is 4.65% from 1 July to 31 December 2026. Interest is compounded and keeps running after death until the debt is repaid. ### What happens if I reach the equity limit? The council must stop deferring more fees, and it should give you 30 days' written notice before you're likely to reach the limit. Interest can still build up beyond it. The council should review the arrangement with you as you approach 70% of the home's value, including whether you'll soon qualify for means-tested help. ### Can I get a deferred payment agreement for care at home? Generally no. In England DPAs are for people whose needs are met in a care home, although councils can offer them for supported living accommodation. For care at home, the value of your home isn't counted in the means test anyway. ## Primary source https://www.gov.uk/government/publications/care-act-statutory-guidance/care-and-support-statutory-guidance, https://www.legislation.gov.uk/uksi/2014/2671/regulation/9, https://assets.publishing.service.gov.uk/media/69a6d7b62e1f4fbda4252208/economic-and-fiscal-outlook-march-2026-web-accessible.pdf, https://www.legislation.gov.uk/uksi/2014/2671/regulation/2, https://www.legislation.gov.uk/uksi/2014/2671/regulation/5, https://www.legislation.gov.uk/uksi/2014/2671/regulation/6, https://www.legislation.gov.uk/uksi/2014/2671/regulation/7, https://www.gov.uk/new-state-pension/what-youll-get, https://www.essex.gov.uk/adult-social-care-and-health/paying-care-and-support/paying-care-home/deferred-payments, https://www.westsussex.gov.uk/social-care-and-health/social-care-support/adults/paying-for-social-care-support/deferred-payment-scheme/, https://www.legislation.gov.uk/wsi/2015/1841/regulation/3, https://www.legislation.gov.uk/wsi/2015/1841/regulation/7, https://www.legislation.gov.uk/wsi/2015/1841/regulation/9, https://www.legislation.gov.uk/asp/2002/5/section/6, https://www.careinfoscotland.scot/topics/care-homes/paying-care-home-fees/deferred-payment/, https://www.nidirect.gov.uk/articles/paying-your-care-home-fees, https://www.health-ni.gov.uk/sites/default/files/publications/dhssps/charging-for-residential-accommodation-guide-crag-2015.pdf, https://handbook.fca.org.uk/handbook/MCOB/8/?view=chapter, https://handbook.fca.org.uk/glossary/G1294, https://www.handbook.fca.org.uk/form/mcob/MCOB_09_ann_01_20170126.pdf ## Related - [Can the council take my house for care fees?](https://moneyguide.org.uk/answers/can-the-council-take-my-house-for-care-fees-uk/) - [Care home funding options](https://moneyguide.org.uk/family-life/care-home-funding-options/) - [Care home fees and deprivation of assets](https://moneyguide.org.uk/family-life/care-home-fees-and-deprivation-of-assets/) - [What is equity release?](https://moneyguide.org.uk/answers/what-is-equity-release/) - [Care home costs in Scotland, Wales and Northern Ireland](https://moneyguide.org.uk/family-life/care-costs-scotland-wales-northern-ireland/) - [The probate process step by step](https://moneyguide.org.uk/family-life/probate-process/) --- Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.