View more on these topics

A complicated addition to the market

You might well wonder about the name Stonehaven and its background. Well, Stonehaven is the newest entrant in the equity release sector and it has not come to market without considerable preparation. As it launches its trial with a number of introducers, Stonehaven as well as the rest of the market will be looking to see whether it has got its offering right.

Stonehaven is the first lender of recent times to attempt to offer a wide range of options. Is this model right?

The first option – its lump sum and lump sum plus products – offers standard and higher LTVs. Its regular cash release and flexible cash release deals offer drawdown facilities. The first allows regular payments monthly, quarterly, half-yearly or annually. Flexible cash release offers the facility for ad hoc drawdown but this is limited to a secure 50% of the overall facility, which may prove less attractive to clients wanting to secure more defined funding.

Stonehaven has introduced an interest-only option similar to that provided by Scottish Widows, which allows interest to be paid initially with a switch to roll-up later. This option could be beneficial for clients who want to service their loan for an initial period. A date to change has to be agreed and this may prove too restrictive for people who are not sure of when they would like to switch. That said, this option will be a welcome one for some, in principle.

Stonehaven’s offerings also provide a protected equity option which, for lifetime mortgages, has only previously been available from Northern Rock. The benefits of this are clear but it will limit the LTV available which has historically proved to be its weakness.

To pull all the options together Stonehaven offers a ‘build your own’ facility which allows the client and adviser to piece together a plan from the options available.

Interest is calculated monthly with rates starting from 6.02% (6.19% annual). This does not put them at the top of the table but time will tell if the flexibility of the products outweighs that.

For a long time, consumers and advisers have been asking for flexibility but for this to come without complexity. To some, Stonehaven’s product structures may appear to be too complex in a market where simplicity can be king.

Recommended

Kent boom

Kent Reliance took more than 10 times its usual share of new savings and mortgages business in the six months to June 30.

HML appoints Smith as MD

Homeloan Management has made Mark Smith managing director. He will report to Steve Haggerty, whom the company has appointed chairman following his promotion to group commercial director of parent group Skipton.

Complete adds Salt to lender panel

Complete Mortgage and Loan Services has added Salt, the Derbyshires specialist lending brand, to its lender panel A Salt underwriter will work in-house at Completes premises enabling fast decisions and service. This latest addition brings Completes packaged lender panel to a total of 31 lenders.Complete will be offering Salts innovative range of sub-prime and self-cert […]

Online option from Mortgage Choice

Mortgage Choice has launched the next phase of its IT programme by offering brokers access to online applications from its 10 lenders.

Could Proptech revolutionise construction?

By Rebecca Murphy, relationship manager, LendInvest  The construction sector offers enormous potential when considering the implication emerging technologies could have on both existing processes and final results. While the completion of an entirely 3D-printed office block may be ‘sexier’ news than a new smart toolbelt that tracks the wearer’s location on site, each area of development […]

Newsletter

News and expert analysis straight to your inbox

Sign up