Selling a home in the weeks after moving into a care home is exactly what a deferred payment agreement (DPA) is designed to prevent. This page sets out what a DPA is, who the council must offer one to, how the loan, the interest and the security work, how it interacts with the 12-week property disregard, and how it comes to an end. Our paying for care hub already covers the latest published deferred payment statistics; this page does not repeat them.
What a deferred payment agreement is
A deferred payment agreement is an agreement under which the council agrees not to require payment, until a specified later time, of some or all of the amount you owe it for your care, or the repayment of a loan it has made under the agreement (Care Act 2014, section 34, checked 1 November 2026).
The detailed rules sit in the Care and Support (Deferred Payment) Regulations 2014, SI 2014/2671, checked 15 September 2026. In practice, it means fees are paid without an immediate sale, and the debt is settled later, from the sale of the home or the estate.
Who is eligible: the mandatory criteria
The council must offer you a deferred payment agreement if your needs for care and support are being met, or are going to be met, through a place in a care home (SI 2014/2671, regulation 2, checked 1 November 2026).
You must also have a legal or beneficial interest in a property that is your main or only home, its value must not already be disregarded in your financial assessment, and your capital excluding the home must not exceed £23,250.
Outside these mandatory criteria, a council can choose to offer a deferred payment agreement more widely, at its own discretion, though it is not required to.
The legal charge as security
The council needs adequate security before agreeing to defer your fees. In practice that is a legal charge over your home: the regulations define adequate security as a charge by way of legal mortgage, capable of registration as a first legal charge in the council’s favour (SI 2014/2671, regulation 4, checked 1 November 2026).
That charge sits on the property rather than requiring any payment from you while the agreement runs, and it is registered and later discharged as part of the agreement’s administration.
What can be deferred
A deferred payment usually covers what the council is charging you for your care and support under Part 1 of the Care Act (Care Act 2014, explanatory notes, checked 1 November 2026). It can also fund a loan to help you obtain care and support not provided by the council, including care beyond what was assessed as necessary.
That flexibility means a DPA is not limited to exactly matching the council’s own charge for your assessed needs.
The equity limit
The amount you can defer is capped at 90% of your home’s current market or surrender value, less £14,250 and any mortgage or other charge that ranks ahead of the council’s own (SI 2014/2671, regulation 5, checked 1 November 2026). Interest and administration charges added to the deferred amount count towards this same limit.
This means more than a tenth of the home’s value stays outside the limit once both deductions are applied. As an example, a home valued at £200,000 with no mortgage has a 90% figure of £180,000; deducting £14,250 gives an illustrative equity limit of £165,750.
Interest and administration charges
No current maximum interest rate for deferred payment agreements is published on GOV.UK. The regulations set the ceiling as a formula: the maximum rate must not exceed the weighted average interest rate on conventional gilts published by the Office for Budget Responsibility, plus 0.15%.
That rate resets on 1 January and 1 July each year, using the most recent Office for Budget Responsibility report for the relevant financial year (SI 2014/2671, regulation 9, checked 1 November 2026).
Your council calculates and sets its own current rate from that formula, and it must set out the interest rate and any charges that apply in your agreement, as the regulations and statutory guidance require. Administration charges are also allowed, on top of interest, but only to cover the council’s actual costs, such as postage, staff time, valuation, and registering or discharging the legal charge (SI 2014/2671, regulation 10, checked 1 November 2026). These can be itemised individually or charged as an average cost across the council’s deferred payment agreements, provided you are told about them in advance.
The 12-week property disregard, and how it fits
When you first move into a care home as a permanent resident, the council must disregard your home’s value from your financial assessment for the first 12 weeks (SI 2014/2672, Schedule 2, paragraph 2, checked 1 November 2026). During that window no charge based on the home is due, so a deferred payment agreement is not yet needed.
A deferred payment agreement only becomes available once the home’s value is not already disregarded, since one of the mandatory criteria is that the disregard has ended, or never applied (SI 2014/2671, regulation 2, checked 1 November 2026). Councils should aim to have an agreement in place by the time the 12 weeks end. That way, the transition from the disregard to a deferred payment happens without a gap that would otherwise force a sale.
How a deferred payment agreement ends
A deferred payment agreement is repaid by the sooner of two events: the date the home or other secured asset is sold or disposed of, or 90 days after the date of your death, unless the council agrees to allow longer (SI 2014/2671, regulation 7, checked 1 November 2026).
You are not locked into the agreement until one of those points. You can end it at any time during your life by giving the council reasonable written notice and repaying the full amount owed, including any interest and administration charges.
What this page does not cover
It does not calculate what you would owe under a deferred payment agreement; that depends on your own fees, the length of the agreement, and the rate your council sets. The latest published deferred payment agreement statistics for England are already covered on our paying for care hub, rather than repeated here.