Stonehaven Equity Release - Stonehaven Interest Select Plans

Stonehaven Equity Release Plans


(please note that with effect from 26th May 2015, following Stonehaven's acquisition by MGM Advantage, Stonehaven equity release have now been rebranded as 'Retirement Advantage')

*All references to Stonehaven therefore will now be Retirement Advantage.


Innovative by nature, Stonehaven offer the equity release market three alternatives in deciding which form of equity release suits you best. Stonehaven offer an interest only lifetime mortgage, a roll-up equity release scheme or their latest innovation, the Stonehaven Voluntary Select Options Plan.


Dependent upon your requirements, Stonehaven will have equity release schemes to suit, & also a competitive interest rate to match any other equity release mortgages available.
You have protection in knowing that Stonehaven equity release are also members of the Equity Release Council (formerly SHIP) & regulated by the FCA (Financial Conduct Authority).


Stonehaven's Range of Equity Release Plans


Interest Select Options - Stonehaven's principle offering is their Interest Select range of plans which in essence are interest only lifetime mortgage deals. These interest only plans allows you to maintain monthly interest payments for the rest of your life. By repaying the interest only element, you can be safe in the knowledge that the original mortgage balance will remain exactly the same for lifetime of the mortgage.
Voluntary Select Repayment Plans - the latest innovation in range which takes the flexibility of the interest select plans one step further. Rather than having the discipline of regular monthly payments, the voluntary repayment schemes allow for regular or ad-hoc payments of upto 10% of the original amount borrowed each year. The equity release balance can therefore be controlled to either remain level throughout, or now actually reduce over time!
Roll-Up Lifetime Mortgages - The last in the range of Stonehaven equity release schemes is their selection of simple lump sum equity release plans. These allow for a single tax-free capital amount to be released, but this time with no monthly payments, effectively allowing the interest to compound, resulting in a increasing balance over time.


Stonehaven Equity Release Schemes in more detail

1. Stonehaven Interest Select Range - Stonehaven have an excellent alternative to the former popular interest only lifetime mortgage - the Halifax Retirement Home Plan. With many pensioners today increasingly conscious about finances & their inheritance, then the Stonehaven Interest Select range has been designed specifically for them by providing the facility to control their ultimate inheritance. Only available through qualified equity release advisers, the Stonehaven Interest Select plans provide mortgages for pensioners, however with an element of flexibility & financial control.


Since MGM Advantage rebranded Stonehaven as Retirement Advantage, the entire equity release product range has been condensed somewhat. The Interest Select Range is now two products, which are the Interest Select Gold & the Interest Select Platinum. The difference between these two interest only lifetime mortgage products is the interest rate applicable and the maximum loans each will provide.


How the Interest Select Plans work

This interest only mortgage is an alternative to conventional roll-up equity release schemes. Whereas roll-up equity release plans have interest added resulting in the balance increasing over time, the Stonehaven Interest Select plans help to maintain a level balance for as long as payments are continued. This is down to the option of paying the interest off each month by direct debit.
These monthly payments need to be paid by the parents. However, we have had instances of the children offering to cover the mortgage payments, thereby protecting their own inheritance! This would be ideal for people averse to the roll-up nature of standard equity release schemes.

Stonehaven's lending criteria is based on a minimum starting age of 55 & property valuation of £70,000. Properties must be located in England, Wales and mainland Scotland. The minimum loan is just £10,000 and Stonehaven will lend a maximum equity release of 49% of the property value, dependent on age.

The Interest Select range of interest only mortgages now come under the realm of MMR (Mortgage Market Review). Therefore, it is the responsibility of Stonehaven's underwriters to ensure affordability, both before and into retirement. This will be evidenced upon application by proving proof of income via wage slips, annual pension and bank statements which must support each form of income.

The Stonehaven Interest Select plan is classed as an interest only lifetime mortgage as there is no specific term applied to this scheme. This form of retirement mortgage is therefore only repaid once the house is eventually sold, on earlier death or moving into long term care.

The scheme is unique as the monthly payments are classified as a 'contribution' towards the interest being charged by Stonehaven. Therefore, you can choose to pay some, or all of the interest charged each month. The minimum payment that can be made is £25pm with the maximum being the whole of the interest being charged. By selecting the latter option & thus maintaining a level balance, will result in beneficiaries knowing how much their inheritance will be.

The flexibility of the interest only lifetime mortgage scheme allows you to make monthly payments that are affordable. Stonehaven allow you to adjust the monthly payment to fit your budget; with any partial payments of the interest resulting in an element of roll-up on the balance.


Payment Proof Security
Another major advantage of the Stonehaven Interest Select is it's one of a few interest only lifetime mortgages to offer an interest rate that is fixed for the rest of your life. Therefore, you can be safe in the knowledge that regardless of Bank of England interest rate changes, the level of your monthly payments will remain exactly the same from start to finish with the Stonehaven Interest Select range.

Nevertheless, if you do experience financial difficulties in the future & cannot keep up the monthly payments you need not worry unduly. Stonehaven will allow you to stop monthly payments altogether & instead the interest can be roll-up & added to the balance with no adverse record on your credit file.

Stonehaven have the lowest equity release interest rates currently in the market. The Stonehaven Interest Select Gold rate start from only 5.46% monthly & they are tiered dependent upon how much is borrowed in relation to the property value (loan-to-value). They have two interest only rates dependent upon how much you wish to borrow. Their Interest Select Platinum is geared towards requests for maximum lump sums and consequently comes with a higher interest rate.

As an example borrowing £20,000 at 5.46% rate would result in a monthly payments of £91pm. (The overall cost for comparison is 5.87% APR).

* Stonehaven/Retirement Advantage now offer a £1000 cashback on its plans.


2. Stonehaven Voluntary Select Options - the latest equity release product innovation which takes the relatively recent concept of voluntary repayment schemes one step further. Following in the footsteps of Hodge Lifetime, Aviva & Newlife, Stonehaven have launched their own version of this popular type of flexible lifetime mortgage in the form of the Stonehaven Voluntary Select plans - Gold & Platinum versions.


The two plans vary in the amount each plan will lend & the interest rate thereon. Starting at 6.29% monthly is the Voluntary Select Gold plan with a starting age of 55 and a loan-to-value at that age of 19%. This percentage of the property value rises yearly to a maximum of 44% at age 80.

The representative figures for the Voluntary Select Platinum plan is an interest rate of 6.85% monthly, starting with a loan-to-value of 24% at age 55 and a maximum loan-to-value of 49% at age 80.


How the Voluntary Select Plans Work

Effectively, Stonehaven will permit the repayment of upto 10% of the original amount borrowed each year without any penalty being applicable. Therefore, the homeowner can manage their future equity release balance as they think fit. This can be important for those with a low risk profile & wish to protect their final inheritance for the children. This can be repaid either by standing order, cheque or via a bank transfer following a phone call to Stonehaven's administration department. The minimum repayment is £50 & the frequency is unlimited which gives the Stonehaven plan a real boost over Hodge Lifetime & Aviva's versions.


The Voluntary Select repayment plan differs from Stonehaven's interest only lifetime mortgage range as it does NOT need any proof of income to qualify for the amount that can be borrowed. It therefore falls outside the clutches of MMR. The mortgage could theoretically be therefore classified as a self certification or 'self cert' mortgage as NO income checks are required by Stonehaven. The amount that can be borrowed is based on the age of the youngest applicant & the value of the property. Criteria for the property is the same as the Interest Select range; £70,000 minimum property value, £10,000 minimum loan and Stonehaven will lend in England, mainland Scotland & Wales.


The area where the Stonehaven Voluntary Select Repayment Plan will have the edge over the other voluntary plans is when payments of interest and/or capital can commence. Whereas Aviva & Hodge Lifetime only allow initial payments after the first anniversary, Stonehaven will permit payments to commence immediately the plan starts. Therefore, with careful planning from your Equity Release Supermarket adviser, we can tailor your plan to suit your future goals; be it an interest only lifetime mortgage plan, or theoretically by repaying the full 10%pa it could actually turn into a capital & repayment mortgage with a fixed interest rate over 16-17 years!


Now this can help solve the interest only issues particularly when many lenders won't lend too far into retirement. We now have a pensioner mortgage that can lend beyond age 75, on an interest only basis, with no repayment vehicle required & with no proof of income requested. A retirement mortgage solution for 2015 & beyond.


Stonehaven's Interest Select & Voluntary Repayment Plans are an alternative to equity release roll-up.

Funds can be released from a Stonehaven lifetime mortgage scheme for any purpose, but from experience the following list provides an insight into why Equity Release Supermarket clients have released equity with Stonehaven:-


• Debt consolidation purposes
• To purchase a new home
• To clear an existing mortgage in retirement
• Supplement their lifestyle
• Home improvements
• Financial assistance to children



Stonehaven Provide Interest Only Mortgage Solutions From Demanding Lenders


LATEST developments have certainly taken place in the interest only mortgage market, primarily where people coming upto retirement have no repayment vehicle to clear their mortgage, or have a shortfall to clear it.


Thinking lenders would simply extend the term, these interest only mortgagors have woken to the shock of finding out that repayment is being immediately demanded by the lender, be it Santander, Barclays, Natwest etc!


This therefore raises serious issues regarding how repayment is to be tackled: -

• Sell the property to clear the loan
• Remortgage to a new lender
• Consider a retirement mortgage


Of the alternatives mentioned above, Stonehaven have become one of the few companies to offer a way out of this worrying dilemma. Many people do not want to go to the lengths of selling their home, afterall they have gotten where they are now because of the mortgage & see their retirement being spent living there.


Further developments in the mortgage industry with MMR (Mortgage Market review) has lenders now reigning in their interest only mortgage range & ensuring criteria is stricter on lending into retirement, thus few mortgages for pensioners now exist.


Therefore, as a specialist in this field Equity Release Supermarket can recommend Stonehaven as a solution to the interest only mortgage problem. Providing loan-to-value is within guidelines and affordability can be shown (post MMR), then Stonehaven could offer an olive branch to those interest only time bombs which they can defuse with their interest only lifetime mortgage range.


Therefore, all is not lost for this category of mortgage customers & relief is on hand with the range of Stonehaven Interest Select & Voluntary Repayment Plans.



For further information on any of the Stonehaven equity release schemes please visit our Compare Equity Release Deals table.


To request an illustration, click here for your Stonehaven Interest Select quote, or here for the Stonehaven Voluntary Select Plan.


Alternatively, you can speak to a local specialist Equity Release Supermarket adviser on Freephone 0800 678 5159.


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