Shawbrook was founded in 2011 as a UK savings & lending bank who are often referred to as a ‘challenger’ bank given its competitiveness with more traditional & mainstream mortgage lenders. With recent lending surpassing £4.1 billion and accrued deposits totalling over £3.9 billion, Shawbrook Bank is now becoming a major UK lender in its own right.
One of the reasons for it’s success is Shawbrook’s specialist knowledge of the lending markets & having an underwriting approach that is both personalised, but uses the latest in technology to assist with its application process. This enables Shawbrook to gain a competitive advantage and help them develop into niche lending areas of which the 55+ age group is a new endeavour.
The Shawbrook 55 Plus Interest-Only Mortgage is designed to help homeowners over the age of 55 to access the equity in their property for a variety of reasons. One particularly identified by Shawbrook is for those interest-only mortgage prisoners, who are in the unfortunate position of having a maturing interest-only mortgage, with no repayment vehicle and a lender demanding repayment.
Here is where the 55+ Retirement Mortgage helps, as it enables suitable mortgagors the opportunity to remortgage away from their current lender onto a new interest-only plan with Shawbrook, over a fixed number of years. This buys the homeowners time to make a decision as to whether to continue down the interest-only route, or refinance at a later date with a lifetime mortgage. Therefore, if the decision has been made to remain in the property, rather than downsize, Shawbrook Bank offers a potential solution.
To be eligible for the Shawbrook 55+ Interest-Only Mortgage, the main earner must have a minimum income of £16,500 and be aged between 55 & 75 years at application. If there is a second applicant the can be below 55 years of age and the maximum age at expiry of the mortgage is 85 years of age. Income must be from either employment or self-employed, pension income, or have a pension fund that which can be utilised as drawdown or annuity to support the borrowings. Shawbrook use the assumption that retirement age is 70 for employed/self-employed income purposes.
Affordability is measured using an income multiplier of upto 4.5x income, subject to an overall maximum loan-to-value of 60% of the properties current valuation, which must be a minimum of £185,000. The property must be located within England, Wales or mainland Scotland and be the applicants main residence.
The minimum loan available on the 55+ Shawbrook Mortgage is £25,000, whilst the maximum loan is £1 million. This is all subject to there being at least £125,000 net equity remaining in the property once the loan has been released. Please call the Equity Release Supermarket team on 0800 678 5955
for your personalised Shawbrook 55 Plus Interest-Only Key Facts Illustration.
This Shawbrook Retirement Mortgage scheme provides an initial tax-free lump sum cash release for immediate use, with the ability to make monthly repayments of the interest charged. This monthly payment of interest amount will be determined by the product that is selected from their range of variable rate, and additional 3 & 5 year fixed rates.
The 55+ Mortgage is provided over a five to 15 year term. This is an interest only mortgage, hence by maintaining payments, the balance will remain level throughout its term. At the end of the plan, repayment of the capital sum will still be required. This can be either via sale of the property, or a structured repayment method such as repayment by a lifetime mortgage, downsizing or savings/investments.
Shawbrook aren’t members of the Equity Release Council and consequently their plans don’t have the code of conduct applicable like other equity release schemes such as the no negative equity guarantee. However, so long as payments of interest are maintained and the balance remains level, negative equity issues shouldn’t be an issue.
Aswell as interest only payments, homeowners can also make over-payments of whatever amount they choose. One of the positive features of the Shawbrook 55 Plus Mortgage is there are NO early repayment charges on any of its variable or fixed rate products. This keeps to Shawbrook’s philosophy that the 55+ mortgage is acting as a temporary mortgage solution to bridge the time period between remaining in the property, then maybe taking up a lifetime mortgage, or downsizing in the future.
This Shawbrook Retirement Mortgage enables homeowners to spend their tax-free cash as they wish, but unlike roll-up equity release schemes they have the option of making monthly repayments to control the future balance as they wish.
Shawbrook will accept applications which are based on house purchases, remortgage cases and on unencumbered properties.
To obtain further information, or to request a quotation on the Shawbrook 55+ Interest-Only Retirement Mortgage, please contact the Equity Release Supermarket team on 0800 678 5955