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Piece together the Stonehaven options

Finally, after much speculation, the announcement came last week. Following in the footsteps of Partnership Home Loans and Retirement Plus, Stonehaven became the third provider to join equity release body Safe Home Income Plans this year.

Stonehaven boarding SHIP brings some interesting options for advisers and their clients.

A daunting array of options are available including interest-only, lump sum, lump sum plus, regular cash release, flexible cash release and a so-called build your own deal.

Interest rates on the roll up options range from 6.02% for the lump sum option up to 6.49% for the high LTV option.

All products are available from the age of 55 which adds a much greater breadth of options for younger clients. Only two other lenders have offered terms to people under 60 until now, these being Hodge and Norwich Union.

Another feature available from all of the scheme options mentioned above is a protected equity facility. Northern Rock has been the only lifetime mortgage provider to offer this option previously.

Protected equity allows a borrower to protect a set percentage of their future property value irrespective of the final loan amount and equity remaining. This gives a borrower peace of mind when rolling up of interest is a concern.

Stonehaven, by providing this option on its higher LTV product, may attract considerable interest provided needs can be met.

Having found the common ground for the main range of options available, the greatest flexibility comes from the so-called build your own proposition. This allows any combination of lump sum, regular cash release, flexible cash release and also the protected option to be used.

A plan can be built to suit the individual requirements of a client with this facility. The structure will dictate the interest rate applied. This option could provide a solution when traditional offerings fall short of matching a client’s requirements.

Pricing may be the main challenge facing Stonehaven. Market history shows that consumers are sometimes prepared to pay for options which go the extra mile. Stonehaven’s build your own facility can achieve this, although piecing the option together will be a challenge beyond any other.

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