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Archive for November, 2011

Do Stonehaven Offer A Real Interest Only Lifetime Mortgage Solution Following the Demise of the Halifax Retirement Home Plan?

Tuesday, November 15th, 2011

Since its withdrawal in August 2011, the Halifax Retirement Home Plan has certainly left a void in the post retirement mortgage market. What options remain for pensioner mortgages?


Pensioners, who were proposing to use the Halifax Retirement Home Plan at a future date, unaware of its impending withdrawal, have now had their retirement plans severely disrupted.

Enquiries are still being received from retirees looking for a pensioner mortgage which can be used for a variety of lifestyle solutions.

With options from moving house, to holidays, gifting to children & home improvements, there has been a significant reduction in the interest only mortgage options available.


So why was the Halifax Retirement Home Plan Withdrawn?

Enormous demand for the Halifax Retirement Home Plan apparently consigned the product to its own demise. Success is not usually associated with dramatic failure, but it seems the Halifax Retirement Home Plan was in this case, a victim of its own success.

Given the volume of applications Halifax was receiving, even a lender the size of Halifax was struggling with such popularity. Towards its latter days the Halifax back office systems were choking, solicitors being incorrectly instructed & timescales reaching unacceptable levels, so much so that Halifax have actually compensated clients due to administrative errors.


Reasons for the Halifax Retirement Home Plan’s Popularity

Since the products inception in July 1984, the Retirement Home Plan lay hidden in Halifax’s mortgage book for many years.

However, certain intermediaries specialising in equity release, subsequently understood the product had a role to play in providing best advice & offered an alternative to roll-up equity release schemes.

Not everyone is suited to a lifetime equity release scheme where the interest rolls up & compounds annually for the rest of their lives. Roll-up schemes to some pensioners can prove off extremely off-putting, with the balance approximately doubling every 10-11 years. The resultant effect & the impact of the compounding of interest will be that their beneficiaries will receive a significantly lower or completely eroded inheritance.


Therefore, for retirees who did not want this scenario, the interest only lifetime mortgage proved an excellent alternative. Obviously supported by a good secure disposable income, the Halifax monthly mortgage payments could be fulfilled, with the resultant effect of keeping the mortgage balance exactly the same for the remainder of the mortgage term.

However, the doomsday scenario did eventually arrive & the Halifax Retirement Home Plan was pulled on 17th August 2011 at very short notice.


Regulation & the FSA Effect

With the FSA (Financial Services Authority) now imposing stricter regulation on interest only mortgages, this has impacted on the whole post retirement mortgage market.

Regulation here should be reviewed & consideration given to the plight of pensioners.

Over 60’s looking for finance have fixed income for life.

They are already drawing their state, private & occupational pensions.

They are therefore in receipt of a guaranteed income for life.

They can’t be made redundant, be off work due to sickness or take maternity leave!


Additionally & historically the retired generation of today have a different attitude to credit & tend to err on the side of caution. They have benefitted from house price booms of the last decades & consequently on the whole have a great deal of equity to release in their properties.

From a lenders perspective you can’t get much better security than this?


So why are the over 60’s being penalised?

After discussions with various lenders their defence has supposedly been the fragility of repayment. Considering monthly mortgage payments are paid by direct debit & pensions & retirement incomes are paid directly into the bank account, this doesn’t seem to hold true?

The distinction should be therefore be made between the people pre retirement & those post retirement with regards to interest only mortgages.

The FSA has understandably clamped down on first time buyers & mid life mortgagors taking out interest only mortgages with NO repayment vehicles. However, this has been to the detriment of pensioners whose cause has been undermined.

So for now we have to accept the level of caution in the mortgage market. However, moving forward consultation & consideration should be given to this corner of the mortgage market as it can have additional benefits to a fragile economy.


The reason being is that pensioners releasing equity in retirement do so mainly for lifestyle reasons:-

  • Home improvements
  • Deposits for the children
  • Holidays
  • New car/caravan

All these expenditures for one reason or another will help boost both the local & national economy.


What Interest Only Pensioner Mortgages Are Currently Available?

The aforementioned issues have arisen with the tightening of interest only criteria. Lenders will now insist on most mortgages expiring by age 75 & this will usually have to be on capital & repayment basis. More often than not this will result in the monthly cost being prohibitive, as paying off a mortgage of £50,000 over a short term of say 10 years can be out of most people’s affordability levels!

Nevertheless, a specialist equity release lender has analysed the situation better than most & hence we unveil the Stonehaven Interest Select Plan.

Offering SHIP security & choice as to the size of the monthly contribution, Stonehaven have covered all bases. This interest only lifetime mortgage provides lifetime fixed interest rates starting from just 6.13% thereby offering affordability now & into the future. With pension incomes rising over the years, but the monthly mortgage payments guaranteed to remain the same, the Stonehaven interest only equity release plan provides protection from future increases in interest rates.

However, it doesn’t end there because if financial difficulties do arise then there is always the option to switch it over to a roll-up equity release plan with Stonehaven. No further payments are then required & dependent upon whether the switch was planned ahead or not, will determine whether an extra 0.2% is added to the rate.

Stonehaven are members of SHIP & regulated by the FSA.


Rumour has it that niche lenders are now starting to look into pensioner mortgages & eyeing business opportunities, so there does seem to be light at the end of the retirement rainbow!


If you wish to make an enquiry on the Stonehaven Interest Select call the Equity Release Supermarket team on Freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk


Equity Release Supermarket Announces New Exclusive Cashback & Low Interest Rate Deal with Just Retirement

Saturday, November 12th, 2011

Following hot on the heels of Equity Release Supermarket’s recently advertised Aviva cashback/valuation/interest rate deal, Director Mark Gregory  is pleased to report a further exclusive equity release offer from Just Retirement.


‘We are pleased to advise that we now can provide a much improved offering to our customers from Just Retirement. On the back of a successful year in the equity release market, our achievements have now been recognised & rewarded by Just Retirement.’


Similar in nature to the Aviva deal, Just Retirement are to offer Equity Release Supermarket customers an amazing £700 cashback, FREE unlimited valuation & specially reduced interest rate of 6.35%.

The £700 cashback coupled with free unlimited valuation will enable our customers to submit an equity release application with NO upfront fees.


Major beneficiaries of the free valuation will be the applicants with higher property values, who will benefit from a completely FREE valuation. An example of this can be seen on a property valuation of £500,000 which will save such Equity Release Supermarket  customers a sizeable further £500!’
The combination of free valuation & cashback (which offsets the application fee) results in the only fixed set up cost to be the equity release legal fees . These can be offered to Equity Release Supermarket customers for as low as £349+VAT & disbursements.


Just Retirement are one of the leading equity release companies whose drawdown scheme has recently undergone a major review, the results of which are now becoming evident.

The Just Retirement drawdown facility, which used to be capped at 100% of the initial release, has now been revised for the first time since its inception over 5 years ago.

The review has resulted in Just Retirement’s drawdown facility being increased from 100% to 200% of the initial withdrawal. This now puts it in line with fellow equity release lenders such as LV= which uses the same formula for calculation of the size of the additional reserve facility.


To request a quote on the special offer from Just Retirement please click here.

To find your local Equity Release Supermarket adviser please click here or call freephone 0800 678 5159.


Equity Release Supermarket – New Exclusive Cashback & Low Interest Rate Deal from Aviva

Friday, November 11th, 2011

Equity Release Supermarket is pleased to announce its new equity release deal from Aviva.


Commenting on the exciting new deal from Aviva equity release which offers clients a FREE valuation* plus a £500 cashback & specially reduced interest rate of 6.32%, director Mark Gregory states…


‘the offer from Aviva is testament to the work & progress Equity Release Supermarket is making in the equity release market. Buoyed by the growing consumer confidence in equity release schemes, I feel that we are now positioned to increase our market share. Excellent deals from the likes of major equity release companies such as Aviva will help my team of advisers promote such competitive equity release plans.’


Equity Release Supermarket are now recognised as one of the major independent equity release brokers in the UK. Their market leading website offers all the current equity release interest rates & exclusive offers currently available.

Experience the Equity Release Supermarket website or to speak to one of their experienced equity release advisers call freephone 0800 678 5159.


*Free valuation applies to property valuations upto £250,000


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