Hodge Lifetime considering drawdown lifetime mortgage launch

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Hodge Lifetime is considering launching a drawdown lifetime mortgage that allows customers to release smaller chunks of cash instead of receiving the full agreed amount at the outset.

Hodge has not yet decided on the product features and has no firm launch date.

However, Mortgage Strategy understands the provider would offer customers the ability to pay off up to 10 per cent a year without incurring early repayment charges, a feature it offers on its standard lump sum lifetime mortgage. Customers can repay the loan in full without incurring ERCs after five years if they sell the property.

Currently, Just Retirement, Aviva and LV= offer drawdown lifetime mortgages.

Last week, Hodge reduced the rate on its lump sum lifetime mortgage by 0.3 per cent, from 6.13 per cent to 5.83 per cent.

Hodge Lifetime sales director Jon Tweed says: “A drawdown product is something we are looking at. Core to our ethos at Hodge Lifetime is offering flexible products to our customers so a drawdown would take what we are offering already and make it more flexible. If we decide to go ahead with it, it would build on our already flexible offering.”

Equity Release Advice managing partner Stuart Wilson says: “A drawdown facility is always a good thing. People have a multitude of different needs in retirement and there could be various different reasons you would need to release small amounts of cash, without having to release a big amount up-front. Some people do not need a huge amount of cash up front.”

In 2010, Hodge reduced its equity release lending levels by half as it “refocused” on pension annuities. But earlier this year Hodge said it was looking to increase its equity release presence.