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Hodge Lifetime launches retirement mortgage up to 50% LTV

Retirement solutions provider Hodge Lifetime has today launched a new lifetime product aimed at borrowers entering or in retirement.

The retirement mortgage is an interest-only lifetime loan which does not require capital repayment until the borrower dies or moves permanently into long-term care, although customers must pay the interest each month.

The initial rate of 4.75 per cent is fixed for five years after which it moves to a standard variable rate. After the initial five years, the loan can then be repaid with no early repayment charges. 

Customers can borrow up to 50 per cent of the value of their property or £500,000, whichever is lower.

Mortgage Strategy revealed in July that the product was in the pipeline and after a pilot launch in August, the new product is to be rolled-out to the wider market today.

The retirement mortgage is the firm’s alternative to their own equity release range and aims to bridge the gap between a traditional residential mortgage and a traditional equity release plan.

Hodge Lifetime managing director Deian Jones says: “The current range of equity release products caters very nicely for the asset rich, cash poor customer. For those fortunate to be entering retirement with decent pension provision, the retirement mortgage offers a credible and flexible alternative to the more traditional equity release plan.”

Equity Release Club & Later Life Academy managing director Stuart Wilson says: “I believe we are going to see a lot more innovation over the next 12 months and this product really focuses on market needs.

”Lenders have been panicking over how to lend to the older end of the market – especially with the FCA looking so closely into the world of interest-only loans and I feel like this kind of innovation is what the market needs.”

“My only slight reservation is that brokers need to have a solid understanding of the needs of older clients and I think selling this product as a traditional residential mortgage would be the wrong way to go about it as it simply isn’t that. If we can get a mix of the right people with the right knowledge base working on products like this, it should stand the market in good stead.”


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  • Tom Moloney 5th September 2013 at 12:30 pm

    This is a positive step in the right direction and will offer some clients real value and flexibility. Well done Hodge for thinking outside the box!

  • jim 4th September 2013 at 1:57 pm

    Just checked with Hodge – It is available in Scotland

  • Marco 3rd September 2013 at 9:39 pm

    When the market is crying out for innovation, this product is catering for those with a need for an interest only option…& there are many!

    Significant retirees have experienced & managed debt throughout their lives & lenders recently have reigned in this option for no apparent reason. Roll-up is NOT suitable for everyone.

    The Hodge Retirement Plan can therefore fulfill those peoples needs where they have the ability to manage the monthly payments, now & in the future.

    Again thought has gone into the opt out strategy & this product should only be taken up by those who can CLEARLY show affordability. Simple.

    This is where sound financial advice is required…so completely agree with ‘Stuart’ 🙂

  • stuart 3rd September 2013 at 12:12 pm

    As a sector we need to focus on the customers needs, and clearly in a lot of cases the need of secured funding is NOT going to be met by a roll up lifetime loan as the affordability is there. In fact id go as far as to ask how many lifetime SHIP approved loans have been sold in recent years to clients who clearly had the ability to pay interest but were never offered that as a product option….miss selling again ??!! The fact is that as a sector we CANNOT offer “silo” advice , we must ensure clients are aware of ALL their funding options, and then ensure they know the “for’s” and “against’s” of each product, example…what use is the negative equity guarantee and right of tenure etc to a self employed pensioner with a good pension income,and good other income but the bank are wanting their mortage money back even though the client happily pays the mortgage each month…? Likewise a client who cannot afford payments may well be suited more to a lifetime product, the adviser community MUST embrace a more “holistic” understanding of the CUSTOMERS NEEDS and the products available to meet these needs, this product, like ANY other is NOT suitable for everybody, but NO product is, so its OUR job to match the solution to the need……Well done HODGE for trying to innovate.

  • Robin 3rd September 2013 at 10:38 am

    May I suggest you read the criteria for this before thinking it’s a godsend product. Very few customers will meet the strict requirements.

  • Phil Anderson 2nd September 2013 at 9:34 pm

    Is this available in Scotland?

  • Roger Pangbourne 2nd September 2013 at 5:53 pm

    So this isn’t an Equity Release plan and therefore doesn’t have all the Equity Release Council protection afforded by such plans.

    With no interest rate cap on the product at the outset, how is this a good thing for consumers or the industry?!

    Such products need a cap (or lifetime fix). Advisers (and customers) tread carefully!