Hodge Lifetime has an enviable reputation in the financial industry, most specifically within the area of equity release. They started the first plans back in the 1960’s when they created the essence of equity release schemes.
The Hodge Flexible Lifetime Mortgage offers a rather unique spin on the everyday equity release and lifetime mortgage schemes currently entering the market. The most unique feature of this product is that it allows you to repay 10% of the initial loan amount each year without an early repayment charge. Just this one feature can make this a very attractive alternative when compared to other lifetime mortgages, especially for those retirees who want to be able to somehow lessen the amount borrowed or cap the interest compounding.
There are two different ways that you can incur early repayment charges with this product. First, if you move your residence within the first 5 years of the lifetime mortgage, the lender has a reducing penalty of 5% which reduces to 1% over the course of the same term.
There is a second feature established to protect you should you want to downsize. This feature enables you to repay the entire plan off if you move & downsize after the first 5 years following the initial borrow. Both of these rules apply if you choose to move your residence. If you do not choose to move house, there are a different set of early repayment guidelines which are linked to long term interest rates called SWAP rates.
The ability to repay interest is not the only unique feature of the Hodge Flexible Lifetime Mortgage. This product doesn’t mandate that the entire borrowed amount be taken straight away. Instead, you can borrow a smaller amount immediately and then create a reserve of cash that you can borrow on, or drawdown on, later in the future should you need to do so. This means that you don’t have to borrow more than you may need and end up paying interest on money that you didn’t actually need to borrow. Instead, you can borrow as needed to fit your spending plans. The initial amount borrowed will have the advantage of a fixed interest rate.
There are eligibility criteria in place to qualify for the Flexible Lifetime Mortgage from Hodge Lifetime. First, you must have a property that is worth a minimum of £100,000 and you must borrow at least £20,000 in your initial withdrawal. Lastly, you must also be aged 60 or over and be a resident of mainland Scotland, Wales, or England.