Canada Life - Interest Select Gold
  • Retirement Advantage Interest Select Gold
  • Rate: 4.98%
    APR: 5.21%
    Incentive: Yes
    Offers: Cashback | Free Valuation | Interest Servicing Plan | Inheritance Protection | 8-Yr Fixed Early Repayment Charge | Downsizing Protection Drawdown Option* | 3-Yr No Early Repayment Charge**

Background

Retirement Advantage, previously known prior to 2015 as Stonehaven, are a trusted financial services company, known for reputable retirement products such as Annuities, Retirement Accounts and Equity Release. All these products form part of their retirement planning operations of the company. Retirement Advantage is known for its strength and reliability, most notably of which equity release is the major focus of the company. With £2.1 billion of funds readily available in their portfolio, Retirement Advantage are able to fund their lifetime mortgages both via their own cash & from outside sources.

The Interest Select range of products are designed with repayments in mind. Offering a potential solution to the interest-only residential mortgage time-bomb, the Retirement Advantage Interest Select plans allow the homeowner to manage the interest being charged, thus gaining a foothold on what the future balance will be & ultimately the inheritance they leave behind.

Criteria

For this particular product in the Interest Select portfolio, applicants must be at least 55 years old and have to be under age 90. If using this with a spouse, the youngest borrower must be 90 years old or younger in order for the couple to qualify. There are qualifications related to the property value as well. The property must be valued between £70,000 and £6 million in order to qualify. However, if the property value exceeds the maximum, applicants still have a chance to qualify. Those particular cases are reviewed on a case-specific basis. Lastly, the property must be located within England, Wales or Scotland.

Loan-to values which calculate the maximum equity release loan available under the Interest Select Gold plans start at 19% of the property value at age 55, rising to an overall maximum of 44% from age 80. The minimum loan amount under the Interest Select Gold product is £10,000 while the maximum loan amount is currently £750,000. For loans greater than £750,000, bespoke quotations are still available, hence please contact the Equity Release team on 0800 678 5159 for your personalised Retirement Advantage Interest Select Gold Key Facts Illustration.

Features

There are many features to the Interest Select Gold product, and the Interest Select options offered through Retirement Advantage (formerly Stonehaven).

The key feature with the Interest Select products is that you are able to pay some or all of the interest, so you don’t have to really worry about roll-up of interest. And with the Interest Select Gold you can choose to pay anywhere from 50-100% of the interest charged and you can pay it for anywhere between 5 years and upto the lifetime of the loan. If you decide over time that you don’t want to be paying the interest, you can simply convert to interest roll-up and cease making any interest payments. With that feature, the product proves to be very flexible and removes any concerns over repossession as exists in the residential mortgage market. You can miss up to three interest payments before the product is converted automatically to an interest roll-up plan and for convenience, you can pay via direct debit each month.

Early repayment charges on the Retirement Advantage products are the most favourable in the whole of the equity release marketplace. They are fixed and transparent, and easy to understand., providing peace of mind from the outset. The early repayment charge (ERC) is fixed over an 8-year period following completion of the loan. These start at 5% of the original loan amount in the first 5 years, then 3% for the following 3 years. Thereafter, no early repayment charge is payable. Partial repayments may also be made, providing there is a minimum loan balance of £10,000 remaining on the account.

An important additional feature that comes with the Interest Select range is the Downsizing Protection Feature. Should you decide to downsize & move house after 5 years, then you may not require the lifetime mortgage any longer. Retirement Advantage will allow full repayment of the lifetime mortgage, with NO penalty in such situations on their Interest Select products.

The Early Repayment Waiver feature included, provides another early repayment feature which avoids the necessity of having to pay an early repayment charge at a time of bereavement or disability. In joint life applications, should one party die or move into care, the surviving partner has a 3-year window of opportunity in which they can repay the loan with no ERC.

In planning for your retirement, should the maximum equity release loan not be required immediately, however its known additional sums may be required in the future, Retirement Advantage have the option of adding a drawdown facility to the plan. This cash reserve facility will allow homeowners to withdraw extra sums of cash from the loan that weren’t taken on day 1. The minimum drawdown amount is just £2,000 and can be taken as frequently as required. The advantage of drawdown is that interest is only charged on any loan actually taken, not whilst left with the lender & unutilized. The effect of adding the cash reserve facility is an increase in the standard interest rate by 0.2%.

Borrowers are also able to take part in an Inheritance Guarantee with the Interest Select Gold which is offered free of charge. It also comes with an Equity Release Council backed ‘No Negative Equity Guarantee’ as well as competitive lifetime fixed interest rates. So, loved ones cannot be burdened with any outstanding debt themselves, following the sale of the property.

Suitability

Those likely to benefit from this product are those consumers who are concerned with the prospect of interest roll-up. Most of those concerns relate back to losing equity in the property. With this product, you don’t have to roll-up interest which can prove very important to those consumers who want to protect their equity. This is also a solid product for those who want to make regular payments. Lastly, with the Interest Select Gold product, consumers may be able to still leave behind some inheritance to their loved ones. Because of the ability to make payments, the final debt owed is much less than with a roll-up option.

To obtain further information, or to request a quotation on the Retirement Advantage Interest Select Gold Lifetime Mortgage, please contact the Equity Release team on 0800 678 5159 today.

* The addition of a cash reserve facility has the effect of adding 0.2% to the baseline interest rate.