The minimum interest payment allowed is £25 and the maximum is the full interest amount accrued. The homeowner is able to set the amount of the payment as well as the duration of the payments at the outset of the loan. That payment amount cannot be changed during the repayment term, unless the payment is increasing as a result of a rate change.
The early repayment charges with this product are fixed for the first ten years after completion of the advance. For years one through five, the charge is 6% and for years six to ten the charge is 3%. The product does provide downsizing protection which means that the homeowner will not incur any early repayment charge if they pay off the loan as a result of selling the home to move to a different property, so long as the sale and move occur at least 5 years after completion of the advance.
The lifetime mortgage is portable and does provide a no negative equity guarantee. This means that if at the eventual sale of the property, the home does not sell for enough to pay back the total loan balance, loved ones are not responsible for the difference.
The OneFamily Interest Payment Standard has a variable interest rate which is calculated by utilising a base interest rate (collar). OneFamily take the annualised Consumer Price Index (CPI) figure every September & add this to the collared base interest rate every December. The sum of these two figures gives us the interest rate that will be charged for the following 12 months, effectively giving a one-year reviewable fixed rate.
To counter any run-away interest rates, OneFamily provide an interest rate cap, which means an upper interest rate limit is applied to the scheme. This provides a guarantee of the maximum interest rate that OneFamily can ever go upto for the lifetime of the plan. For the latest capped & collared Lump Sum Standard interest rates contact Equity Release Supermarket on 0800 802 1051.
Interest payment amounts are fixed at the outset of the loan and can range from £25 to up to 100% of the monthly interest accruing on the loan. The payment term can range from 1 year to the full lifetime of the loan, but once the term and amount has been determined, neither can be altered. All payments are made through direct debit and start in the month following the advance. The homeowner can have contributors help with payments but the payment must be extracted from an account in the name of the borrower.
The homeowner is allowed to miss up to 4 payments. These payments are not sequential but rather the homeowner can only miss a total of 3 payments over the full payment term of the loan. If a fourth payment is missed, the product will be switched to the OneFamily’s Lump Sum Interest Roll-up or OneFamily’s Lump Sum Voluntary Payment Lifetime Mortgage. The interest rate that will be applied will be whatever the interest rate was for the applicable product at the time the original advance was made.
There is no valuation fee applied with this product for any property valued up to £1 million. If the home is valued above that amount, the valuation fee scale will apply. The homeowner is responsible for any of their own legal fees, if applicable.
The loan-to-values (LTV’s) for the Interest Payment Standard product start at age 55 with 21% for single life and 20.0% for joint life. They go up to 50% for single life and 50% for joint life for ages 85-100. If borrowing jointly, the joint LTV is calculated based on the youngest borrower’s age.