• Leading retirement specialist launches innovative fixed lifetime mortgage with full SHIP approval
• Just Retirement this week launches its Fixed Lifetime Mortgage (FLM).
The Fixed Lifetime Mortgage, a new equity release product available exclusively through the independent financial adviser community, carries enhanced benefits which may allow older homeowners who are (or have been) smokers or have a ‘lifestyle’ or medical condition the opportunity to access a higher cash sum. Initially the plan will be available as a limited pilot only.
Just Retirement, recently awarded SHIP (Safe Home Income Plans) membership, will give a cash lump sum to homeowners in England and Wales secured against the property as a fixed charge, from a minimum £15,000 to a maximum £250,000, depending on the value of the property and their age.
The cash lump sum can be used for any purpose – and Just Retirement will consider lending above the £250,000 standard ceiling should individual circumstances merit a higher advance. Minimum property value is £100,000.
Just Retirement’s fixed charge will be attractive to those wanting absolute peace of mind, as it does not increase however long the homeowner lives (assuming no additional loan is required).
Other key features include a repayment reduction option which allows homeowners to repay lower sums if they die within the first 5 or 10 years of the plan, and a no-negative equity guarantee.
"So even if house prices fall and the property is worth less than the fixed charge, the homeowner will not be compromised," said Nigel Barlow, Just Retirement marketing and product manager.
"Additional key features of this innovative product include flexibility for the homeowner to borrow more at any time of the plan’s life, and the fixed income to be paid directly to a care provider if the plan-holder has to move into a nursing home," added Barlow.
FIXED LIFETIME MORTGAGE – summary of key features:
A cash advance secured by a fixed charge on a property
Minimum £15,000 initially
Maximum £250,000, possibly more subject to individual consideration
For any purpose
The fixed charge doesn’t increase, however long you live (except when an additional loan is required)
Repayment reduction options allow you to repay less if you die within the first 5 or 10 years
Competitive APRs
All house price growth belongs to the homeowner (or their estate)
Flexibility to request further loans at any time – minimum £5,000
Enhanced cash amounts for people with medical or lifestyle conditions
Income option available
Also with enhancements for medical or lifestyle conditions
Innovative care income option
Automatically included
Fixed income paid to care provider or individual on early redemption if moving into care
Income set at outset of the plan
Helps you to cope with the unexpected
No-negative equity guarantee at all times
For peace of mind
Minimum property value £100,000
Maximum charge – 75% of property value
According to the latest Council of Mortgage Lenders (CML) survey*, over 15,000 lifetime mortgages (equity release for older home-owners) with a value of £693 million were advanced in the second half of 2004.
The figure brings the total number of outstanding lifetime mortgages in the UK to over 83,300 and their total value to just under £4 billion. The equity release market is now 25 times bigger than in 1995, said the CML.
