In 2015, OneFamily was produced from the merger of Family Investments and Engage Mutual. It now is the trading name of Family Assurance Friend Society and manages more than £7 billion and has more than two million members. OneFamily is trying to add more innovative lifetime mortgage lending to its portfolio of products as it is most well-known for specialising in Guaranteed Over 50’s Life Cover.
The Interest Payment Standard from OneFamily is a lifetime mortgage that allows the homeowner to receive a larger one-time lump sum payment as part of their equity release scheme. It also allows the homeowner to pay up to 100% of the monthly interest that accrues on the loan for a period of time that can be set by the homeowner.
This product maybe ideal for homeowners with mortgages at, or near retirement which are in need of repayment, but have no repayment strategy in place. The OneFamily Interest Payment Standard Plan will enable such mortgagors to switch away from the residential mortgage market by facilitating this OneFamily interest-only mortgage for the rest of their life.
The OneFamily Interest Payment Lifetime Mortgage plan offers homeowners a simple one-off lump sum cash payment to spend as they wish. This product is geared towards homeowners looking for the lowest rates possible, and happy with the variable nature of the interest rate charged. They will also wish to make repayments of Interest-Only that will enable them to maintain a level balance leaving greater equity in their property than a traditional roll-up plan.
The qualify the homeowner must be between the ages of 55 and 100 for the OneFamily Interest Payment Standard lifetime mortgage. If borrowing jointly, the loan-to-value will be based on the younger applicant’s age.
Eligible property values start at £70,000 and have no maximum threshold, though any property valued over £2,000,000 must be accompanied by a referral. The property must be located in England, Scotland or Wales to be eligible. However, please contact us directly on properties valued over £2 million as cases maybe individually underwritten, with bespoke quotes via Equity Release Supermarket on Freephone 0800 678 5955
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 678 5955
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.
Additional borrowing is available with this product, approval for which is contingent on lending criteria. Homeowners are not eligible for additional borrowing until 6 months after the completion of the initial advance.
The minimum amount available for additional borrowing is £4,000 and the maximum is the maximum LTV available on the product. Switching to a higher LTV product is not allowed. Similar to the original product, the homeowner is permitted to make the monthly interest payments on any additional borrowing taken and they can do so immediately upon the completion of the additional borrowing.
The OneFamily Interest Payment plans come in both Lite & Standard versions. They differentiate by the LTV’s of each scheme and corresponding interest rate. The Interest Payment Standard plan has higher loan-to-values than the Payment Lite, thus can lend a higher maximum loan amount. As a consequence, the Interest Payment Standard plan offers a higher interest rate than the lite, due to its perceived risk being higher.
The OneFamily Interest Payment with variable interest rate is ideal for the homeowner who is concerned with interest roll-up on their lifetime mortgage product. This product works well for the homeowner who wants to maintain a routine in making consistent monthly payments but is also comfortable with a variable interest rate based on Consumer Price Index (CPI).
This product allows homeowners to pay against the interest accruing on their loan and the homeowner is able to dictate the time period over which they make those payments. Many homeowners are conditioned to make monthly payments and would like to continue in that same vein, in which case the One Family Interest Payment Standard provides an excellent equity release solution.
*Free valuation offer on property valuations upto £1m (pro-rata thereafter) & for limited time only
To obtain further information or to request a quotation on the OneFamily Interest Payment Standard Variable Rate Lifetime Mortgage plan, please contact the Equity Release Supermarket team on 0800 678 5955