Saga’s plan, in association with Scottish Widows Bank, allows borrowers to draw down money as and when they need it with no extra charges, rather than the more costly route of taking out one large amount and then using it over a period of time.
Available to borrowers aged 60 and over the product will be priced at 7.04% pa fixed for the life of the loan. In addition, the Saga Home Equity Loan carries an arrangement fee of £295, which compares favourably against many lenders who charge in excess of £450. Saga’s plan will also refund valuation fees up to a maximum of £280 on completion, which will cover all properties worth up to £350,000.
Some equity release schemes require customers to pay for both their own and their lender’s solicitors fees. With Saga’s plan the customer can choose their own solicitor, and providing they are not a sole practitioner, Scottish Widows Bank will use the same firm with the result that the customer will only pay for one firm’s fees.
Andrew Goodsell, managing director, Saga, commented: “Over recent years many people have seen a drop in their retirement income whilst their property has continued to grow in value. This has left an increasing number of people asset rich but cash poor. For people that are well into retirement and want to remain in their own home, equity release could have a role to play. Our pricing structure and flexible draw down facility will encourage customers only to take what they need when they need it.”
With the Saga Home Equity loan, no interest repayments are required throughout the term of the loan. The interest can be added to the loan on a monthly basis and rolled up, all of which is repaid from the final sale of the property. The Saga plan has a no negative equity guarantee so if there is insufficient equity to repay the outstanding debt neither the borrower nor their estate will be pursued.
