The Hodge Lifetime Equity Release options
Hodge Lifetime offer 4 types of lifetime mortgage that we will focus on in this equity release review:
- Flexible Lifetime Mortgage (with variable early repayment charges)
- Lump Sum Lifetime Mortgage(with variable early repayment charges)
- Lifetime Mortgage (with fixed early repayment charges)
- Indexed Lifetime Mortgage (with fixed early repayment charges)
All options come with the usual 'No Negative Equity Guarantee’ meaning that you will never pay more than the value of the property and you retain 100% ownership of your home and are able to remain there until you die or move into care.
Flexible Lifetime Mortgage
The Flexible Lifetime Mortgage gives you the option to take out an initial lump sum but then withdraw further cash sums at a later date. This means that you will only be charged interest on the actual amount you borrow but any subsequent loans would be charged at the interest rate at that particular time. The minimum amount you can withdraw is £1,000 per transaction.
In addition with this particular Lifetime Mortgage you can repay up to 10% of the original cash sum plus 10% of any future withdrawals on an annual basis without being charged and have the option to repay the loan as a result of selling your home after 5 years (if you repay the loan within the first 5 years charges will apply).
The maximum loan available is £500,000 but the amount of money you can actually borrow will depend on your age and the value of your property.
Lump Sum Lifetime Mortgage
Similar to the Flexible Lifetime Mortgage but without the flexibility; this equity release option lets you borrow a lump sum in a single payment (depending on your situation further lending could be available).
The lump sum lifetime mortgage also comes with the option to repay 10% of the value of the initial loan each year and the opportunity to repay after 5 years as a result of selling or moving to a different property without incurring early repayment charges.
Again early repayments charges will be incurred for any repayment (over the allowed 10%) within the first 5 years.
This Lifetime Mortgage is available to a slightly younger customer base, 55 instead of 60 and offers a higher loan value of up to one million pounds.
The loan is available in a single payment and you still have the option to repay up to 10% of the initial loan on an annual basis. Repayment charges for the full loan are on a fixed scale and payable for up to 10 years.
Indexed Lifetime Mortgage
The indexed lifetime mortgage is also available to 55 to 85 year olds with a maximum loan of £1,000,000. The main difference with this type of lifetime mortgage is that the interest on the loan is variable and applied once a year to reflect annual movement in the All Items Consumer Prices Index annual rate.
The plans come with an ‘Interest Rate Guarantee’ that includes a ceiling and floor rate which means you will never pay more or less interest than the two thresholds; these will be set out in the initial mortgage agreement.