Senior Australian Equity Release Association of Lenders has moved to make the no negative equity guarantee a mandatory component of the code of conduct, so borrowers can never owe more than the value of their home.SEQUAL executive director Kieren Dell identifies three exceptions to the no negative equity guarantee applying."First, fraud by the borrower, such as a misrepresentation of age. Secondly wilful damage to the property and finally if the borrower attempts to sell the property without approval from the lender."Under the changes the no negative equity guarantee will still apply even if the retiree defaults on their loan, that's powerful protection for borrowers".Further changes to the code include default settings for loan calculators, with property increases set at four per cent, interest rates can not be less than currently offered on the product and the minimum projection must be life expectancy plus five years.Dell says that stress testing can then be applied in changing the parameters, but the default settings have been set, "to show the potential applicant the effect of compound interest over the long term".He added, "most of the lenders either already meet the new standards or are very close, those who don't have until 1st January 2008 to comply".