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Posts Tagged ‘Ad-Hoc Repayments’

No Early Repayment Charge Equity Release Plan Launched by Hodge Lifetime

Monday, April 2nd, 2012

Following in the steps of the Stonehaven Interest Select plan, Hodge Lifetime are launching a new equity release plan with repayment options that include NO early repayment charges.

Previously, only Stonehaven equity release had created a niche in the lifetime mortgage market by offering an interest only lifetime mortgage. Stonehaven allow you the facility to repay the interest charged monthly, thus maintaining a level balance.

However, Hodge Lifetime has now created their own niche product, by offering a roll-up equity release plan with a spin. The unique feature of the plan is the facility of allowing partial repayments of upto 10% per annum with no penalty. This is a first in this previously inflexible early repayment charge equity release UK market.


The Mechanics

The option to repay without penalty applies after the plan has been running for at least 12 months. You then have the possibility of repaying all of the interest & an even an element of capital, if you wish. The minimum repayment is £500.

The major advantage of this lifetime mortgage is that no penalty would apply to this repayment as long as no more than 10% of the initial capital borrowed is repaid.

An example of this would be someone borrowing £25,000 initially. After, 12 months of the plan running they can then repay upto £2,500 each year thereafter. With a launch interest rate of just 6.31% annual equivalent, by paying the full 10% allowance would allow you to repay not only the interest but also the capital. The Hodge Lifetime Plan could then effectively be even used as a form of flexible lifetime repayment mortgage!


Background to Hodge Lifetime

Hodge Lifetime introduced the very first equity release plans in 1965 and have continued to earn a reputation for reliability ever since. Hodge Lifetime is a subsidiary of Julian Hodge Bank and is a founder member of SHIP (Safe Home Income Plans).


Plan Facts

The Hodge Lifetime Lump Sum Lifetime Mortgage allows you to take a single cash lump sum with a fixed interest rate for life. Plans start at age 60 & there is a minimum property value of £100,000 with a £20,000 minimum initial withdrawal limit. The plan is available in England, Wales & mainland Scotland.

Hodge Lifetime’s standard early repayment charges only apply for the first 5 years on a 5,4,3,2,1 basis. There is also an additional potential variable repayment charge dependent upon the movement in 25 year interest rate swap rates.

However, this variable penalty will be waived after 5 years. This ‘Downsizing Protection’ feature allows you to repay the Hodge Equity Release Plan with NO penalty if you move home after 5 years.

However, the main focus surely on the Hodge Lifetime Lump Sum equity release plan will be possibility of repayment the interest with a choice of when & how much.

No other equity release schemes provider will permit this at present with so much flexibility. Hodge will allow two payments per annum subject to the 10% maximum repayment & no penalty.


Who Would the Repayment Facility Benefit?

People who maybe wish to inhibit the traditional roll-up effect of their equity release plan would find the Hodge Lifetime plan of benefit.

Those unable to commit to a fixed monthly repayment as their preferred choice would be to make ad-hoc repayments once a cash sum has been saved.
People who may receive an unexpected windfall in the future
Parents who may wish to gift to their children for financial reasons (e.g. house purchase) knowing they will be repaid over a future term
Those at Pre-state pension age, need a capital lump sum now, but may wish to repay chunks back in the future from their extra income
The list could go on…


What to do next…

If you have been dissuaded by equity release early repayment charges in the past, then take a close look at this exciting new plan from Hodge Lifetime. The ability to repay 10% off the balance each year with NO penalty is unique.

With an opening offer of a reduced valuation fee of £99 for property values upto £350,000, this certainly looks likely to follow hot on the heels of Stonehaven’s Interest Select Plan.


For further information or to request a quote please visit Equity Release Supermarket’s dedicated Hodge Lifetime Lump Sum equity release page. Alternatively call the team on 0800 678 5159.


Equity Release – Five Factors To Consider Before Taking A Decision

Tuesday, December 14th, 2010

Do you need extra more money during your retirement?

If the answer is yes, then equity release can be an ideal solution. Today, many equity release companies exist who provide different mortgage schemes to homeowners who are above 55 years of age. By opting for these schemes, you can release equity or money against the value of your home. Before taking a final decision, it is important to consider few factors. These include:


Flexibility – You have to check how flexible your equity release plan is. Choose the scheme which allows you to draw more money or allows you to sell the property, if required. There are lenders who also allow the applicant to make ad-hoc repayments off the balance (subject to early repayment charges)

Fees – The fees for purchasing equity release schemes depend on the provider. Consideration should be given to the plan whose fees are the lowest. Nevertheless, this shouldn’t be classed as the over riding factor. Special offers such as cashbacks, free valuations all help to keep the costs down. Check with Equity Release Supermarket to see what offers they can find you.

Interest rates – Similar to fees, the interest can vary on the basis of the scheme or mortgage chosen. Before choosing, it is recommended to compare the interest rates of different schemes. Rates currently can vary from as low as 6.59% up to 7.59% & this can have a massive effect on the final balance at the end of the day. Always check aswell that the interest rate being quoted is annual. Some equity release companies quote on a monthly & some annual basis. A monthly interest rate of 6.59% is actually higher than an annual interest rate of 6.59%, due to the quicker compounding effect of monthly v annual interest.

S.H.I.P (Safe Home Income Plans) – This is an organisation which was set up to protect the rights of consumers or purchasers of home equity schemes. Whichever scheme you choose, ensure that the lender is a member of this organisation. As a result of using a ship equity release company, means that the solicitor will have to sign a SHIP certificate to say that they have acted on the clients behalf & they understand what they are entering into. Additionally, being a member of SHIP means the scheme has to meet certain criteria – to be able to be repaid; to be able to move house & inlcude a no negative equity release guarantee.

Financial Services Authority (FSA) – The FSA is a regulatory body in the UK which takes care of the rules and regulations followed by the financial companies. Always choose a company which is registered with the FSA thus affording the protection the FSA provide.


It is advisable to hire a qualified financial consultant before investing in any one of the equity release schemes currently available in the market.

Equity Release Supermarket have experienced advisers who can source the whole of the market to find the best equity release deal for you.

Call freephone 0800 678 5159 or email mark@equityreleasesupermarket to discuss your requirements further.


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