Retirement Advantage, previously known as Stonehaven Equity Release, offers an array of retirement products for homeowners. Aside from the standard equity release products offered, Retirement Advantage has also now introduced a line of products to be used by landlords.
The suite of landlord lifetime mortgages offered is the first of its kind to hit the market since the New Life Buy-To-Let equity release plans introduced many years ago. These allowed landlords to use equity release products on homes that are rented out on a Assured Shorthold Tenancy Agreement. In this unique Buy-to-Let Equity release, homeowners can capitalize on the benefits of equity release schemes, even if they are not living in the home.
The Landlord Over 55 Buy-To-Let Options provide homeowners with a one-time lump sum payment. No payments are necessarily due, and interest accrues as it would with a traditional roll-up lifetime mortgage. The interest is added to the loan each month over the lifetime of the loan and only needs to be repaid upon death of the homeowner.
The minimum loan amount allowed with the Landlord Over 55 Buy-To-Let Options products is £10,000 with the maximum being £750,000. The minimum age is just 55 and the maximum is 90 years of age. If two homeowners are borrowing jointly, the youngest borrower must be 90 years old, or younger.
The property value range eligible for the Retirement Advantage Buy-to-Let equity release is £70,000 upto a height of £6 million. However, properties with a valuation above £6 million can still be reviewed individually. To qualify the property must also be located in England, Wales, or Scotland. Please call 0800 678 5955
for your personalised Landlord Equity Release Key Facts Illustration.
In order to take advantage of the Landlord Over 55 Buy-To-Let scheme, the property must be let out as a single residence on an Assured Shorthold Tenancy, of not more than 12 months duration before completion. Multiple family dwellings are not eligible.
Applications from limited or limited liability partnership companies are not permitted under Retirement Advantage’s Buy-to-Let products. A number of tenancies are also not permitted including companies, University, Housing Associations, students, Council, family members, tenants without the right to rent, DSS tenants, or tenants with diplomatic immunity.
The property owners should make sure that if they are required to have a license to let their property, they are able to provide a copy of that license during the application process. Additionally, Retirement Advantages solicitors will need sight of approved certificates for gas & electricity to evidence they have been safety checked.
Under the Landlord equity release product range, the loan-to-values start from 9% at age 55, and ends at 34% of the property value for ages over 80. These are lower lending percentages than the standard Retirement Advantage Over 55 Buy-To-Let product, but represents the additional risk involved with buy-to-let lending.
Landlords can apply for more than one Landlord equity release mortgage and can even hold more than one at the same time.
The early repayment charges are favourable for landlords with them being fixed for 8 years of the loan, as well as any additional borrowing or drawdown from a cash reserve facility. For years 0-5, the early repayment charge is 5%. For years 6-8, the charge is 3% and there is no early repayment charge for years 9 and above.
Additional borrowing is allowed with the Landlord Buy-To-Let Options products and approval for such is dependent upon the criteria at the time of that separate application. The minimum amount allowed under additional borrowing is £4,000 and there is no completion fee applied.
Although Retirement Advantage are members of the Equity Release Council, their Landlord Lifetime Mortgage is not covered by the ERC. Nevertheless, they have still included the important protection afforded by the No Negative Equity Guarantee.
With the Over 55 Buy-To-Let Options, the homeowner doesn’t need to make any payments toward the interest charged on the buy-to-let mortgage. Instead, the interest is rolled-up and added to the existing loan balance. So, this product is most attractive to those property owners who want a lump sum and not have any repayments that could affect their monthly budget. Nevertheless, partial payments can be made if necessary, however any early repayment charge may apply.
All of the Retirement Advantage buy-to-let options are ideal for homeowners who own one or more buy-to-let properties, and still want to take advantage of an equity release scheme to raise capital for whatever purpose. These could be for reasons of mitigating capital gains tax, by not having to sell a rental property, but instead releasing equity to fund other projects.
Additionally, buy-to-let landlords may wish to clear an existing interest-only mortgage, where no endowment or suitable repayment vehicle now exists. Again, rather than having to sell the rental property, a buy-to-let equity release could be used to remortgage the property, thus maintaining the rental income for retirement.
Landlord equity release could also be used to mitigate inheritance tax. As the mortgage debt rolls-up over time it potentially reduces the net value of the estate, however, rental income can still be remain, again supporting retirement lifestyle.
Other uses can include using the Over 55 Buy-To-Let Options plan to assist with long term care funding, part of a divorce settlement and many more besides.
Equity Release Supermarket advisers are on hand to help discuss and advise on the potential benefits of the buy-to-let equity release plans from Retirement Advantage.
To obtain further information or to request a quotation on the Retirement Advantage Landlord Over 55 Buy-To-Let Options Scheme, please contact the Equity Release Supermarket team on 0800 678 5955