Voluntary Repayment Schemes
Retirement Advantage Voluntary Repayment Schemes
The Voluntary Payment options offered by Retirement Advantage are available in a range of two different Voluntary Select lifetime mortgage products; Gold and Platinum versions. This portfolio of plans are particularly flexible for homeowners, allowing homeowners to make voluntary payments throughout the year, as they so choose.
There is a great deal of flexibility related to payments made against the initial loan. Homeowners can contribute the equivalent of up to 12.5% of their initial loan amount every year of their loan. These voluntary contributions are unlimited in number, so long as each individual payment exceeds the minimum payment amount of £50. Homeowners can start making payments immediately following the outset of their loan account.
These contributions can be made in a variety of different ways. Homeowners can make payments via BACs transfer, standing order, debit card payment or by cheque, with no concerns as to any penalty should no contributions ever be made. The main advantage of Voluntary Payment Plans are there are no early repayment charges incurred if the homeowner does choose to make a voluntary contribution, as long as they remain with the prescribed limits.
Homeowners can release anywhere from £10,000 to £750,000 with the Voluntary Select products. Loans up to £1 million are considered on an individual basis, so please contact the Equity Release team on FREEPHONE 0800 678 5159 for a personalised Retirement Advantage Key Facts Quotation.
Voluntary Select Lifetime Mortgage Range
There are two Voluntary Select products offered by Retirement Advantage; the Voluntary Select Gold and the Voluntary Select Platinum. The differences in the plans arise based on the maximum loan required, against age of the youngest homeowner. A calculation is undertaken from data taken from the applicants concerned including property value & age.
The Voluntary Select Gold plan starts from age 55 and has a lower loan-to-value (LTV) ratio than the Platinum Plan which results in a lower interest rate. Therefore, to decide which plan offers the best equity release deal will depend upon the age of the youngest applicant and the size of the loan required, both now or in the future via additional drawdowns.
If the homeowner is 60 years old or older they are able to capitalize on higher LTV’s with the Voluntary Select Platinum product. These are on average over 5% higher than the Voluntary Select Gold plan. For a homeowner aged 67, in good health and with a standard property valued at £300,000, this would represent a difference in maximum loans between the Gold and Platinum plans, totalling £19,500.
Voluntary Select Features And Options
There are also features that come standard with both Voluntary Select products such as the following:
Downsizing protection: For both Voluntary Select Plans, homeowners can repay their loan without incurring an early repayment charge, if after 5 years they are selling their home to move to a different one. In such cases Retirement Advantage will waive any penalty upon repayment.
Early Repayment Waiver: The homeowner does not incur any early repayment charges if they choose to repay their loan within 3 years of the date that the first borrower enters long term care, or passes away.
Fixed Early Repayment Charges: Retirement Advantage offers fixed early repayment charges that do not exceed 5% of the original loan borrowed. For repayment in years 0-5, the early repayment charge is 5%. For years 6-8, the charge is 3% and for years 9 and over, there is no charge levied.
Inheritance Guarantee: Retirement Advantage offers this feature free of charge to homeowners. This guarantee allows homeowners to safeguard an inheritance for their beneficiaries by protecting a portion of the equity in their home on eventual sale.
Cash Reserve Facility: Homeowners can add a cash reserve facility to each of the Voluntary Select loans right at the outset. This will affect the interest rate, by an additional 0.2%.
Additional borrowing: Dependent upon lending criteria at the time, existing plan holders can apply for a further advance of equity. The minimum amount allowed for additional borrowing is £4,000 and lending will based upon criteria of the existing product LTV range.
To Whom Will Voluntary Select Plans Appeal to?
• Homeowners wanting the freedom to repay selective amounts off their lifetime mortgage, whenever they decide to choose & by whatever amount they decide upon
• For those opposed to interest roll-up and seeing the compounding effect which is seen to erode the net equity in the property. These homeowners are concerned over the future balance of their equity release plan
• Experienced mortgagors who are happy maintaining some form of payments into retirement which could be interest only, or even capital & repayment should the full 12.5% voluntary payments be made
• Those wishing to protect their children’s inheritance & leave some form of legacy, which can be utilised as as form of inter-generational gifting policy
• Contributors who do not wish to have the commitment of set monthly repayments and the worry this may bring for those on a tight budget
To find out more about the current interest rates and best Retirement Advantage equity release deals on this range of optional partial repayment plans, please visit our Voluntary Repayment Compare Deals Table.
These are lifetime mortgage plans. To understand the features and risk, ask your independent equity release adviser for a personalised Key Facts Illustration