Here’s everything you need to know about our Interest Select Options – key features, how it works, helpful links, guides and brochures.
Our Interest Select Options
Our Interest Select Options are interest-only lifetime mortgages, allowing you to pay some or all of your interest back each month. This means you can reduce the impact of interest building up, manage your loan balance more easily and still own your home for the rest of your life.
- Interest Select Gold
- Interest Select Platinum
Each of our Interest Select Options offers different amounts you can borrow with different interest rates.
View our rates.
Our Interest Select Options stop interest building up on your loan balance. Instead, you make regular monthly payments. If you pay back all of the interest each month, your initial loan amount will remain the same.
You choose how much interest to pay and how long to pay it for. The minimum payment is 50% of the interest and the maximum is 100%. The minimum payment term is five years and the maximum is the life of your loan.
Frequency of payments
- We’ll take payments by direct debit every month
- We’ll collect your payments on the first working day of each month
- You can miss up to three non-consecutive interest payments without any penalty
- If you do miss a payment, you can make up for it with a later payment
- If you miss more than three payments or want to stop making payments, the loan can be converted to interest roll-up. This means the interest builds up each month and the interest rate on the interest paying part of the loan will increase by 0.20% MER, or 0.21% AER.
- You can stop your payments at any time, but you’ll be unable to restart them. Your loan will be converted to interest roll-up and interest will build on a monthly basis.
- You don’t need to prove affordability for your interest payments
- You must make payments by direct debit
- Payments must be made from a bank account in the name of the borrower
- Your payment amount and term will be fixed once your lifetime mortgage is completed
- You won’t be able to increase or decrease these amounts at a later date
Optional £1,000 cashback
You can increase the amount you receive at the start of your loan and add cashback to your lifetime mortgage. This could be used to pay any setup fees.
Our optional cashback doesn’t need to be repaid if you choose to repay your mortgage. Adding cashback will affect your mortgage interest rate. Your financial adviser can explain this to you in more detail.
Our interest rates.
We offer two different types of additional borrowing - a cash reserve facility and a further advance.
Cash reserve facility
When you take out a lifetime mortgage with us, you can take an initial amount and keep the rest in a cash reserve. You can then access this money later when you need it. You’ll only pay interest on the cash once you’ve withdrawn it.
You won’t need to take financial advice each time you want to withdraw money from your reserve. You can make interest payments towards your additional borrowing in the same way as you make payments for your main mortgage.
If you choose to add a cash reserve facility, you’ll need to do this at the start of your lifetime mortgage. It can’t be added at a later date.
Making a withdrawal
You can withdraw from your cash reserve facility at any time. To make a withdrawal:
- Contact our customer services team on 0800 068 0212
- You’ll need to let us know how much you want to withdraw and what you’ll use the money for
- We’ll send you an offer and an offer acceptance form
- Once you’re happy, complete the form and send it back to us
- We’ll undertake some checks and make sure your application meets our lending criteria
- Once our checks have been completed, we’ll pay the money directly into your bank account
We apply a fixed interest rate to each cash reserve facility withdrawal, based on the rate at the time you apply. This may be higher or lower than the interest rate we applied to your initial advance.
The minimum withdrawal amount is £2,000 and the maximum is the total of your cash reserve. If the remaining amount is less than £2,000, you’ll need to withdraw the amount in full
- Your cash reserve amount is fixed at the outset and won’t increase in line with the property value, your age or repayments
- You won’t be able to add a cash reserve facility at a later date. It needs to be included when you set up your lifetime mortgage
Find out more
Get in touch with our customer services team to find out more about additional borrowing, or to find out the remaining balance of your existing cash reserve facility.
Call us on 0800 068 0212.
A further advance allows you to borrow more funds from your property.
You can do this any point, as long as your application meets our lending criteria and there’s still enough equity in your property.
Do I qualify?
In order to apply, you’ll need to:
- Take additional financial advice
- Borrow a minimum of £4,000
- Let us know what you’re using the money for
How do I apply?
- Seek advice from your financial adviser. You can find an adviser at the Equity Release Council if you don’t have one
- Your financial adviser will contact us to start the application process
- We’ll send them an application form. They’ll discuss this with you and help you complete it.
- If your application is successful, we’ll pay the money directly to you
You can make annual payments on the additional borrowing after your application has been successful.
If you take a further advance, the value of your property might need to be reassessed and you may have to pay additional fees, including fees for financial advice. Your financial adviser can provide more details.
View our charges
We apply a fixed interest rate to each further advance. This is based on the further advance interest rate for your product, at the time you apply. This rate may be higher or lower than the interest rate applied to your initial advance.
Fixed early repayment charges (ERCs)
You can choose to repay some or all of your mortgage at any time, but an early repayment charge may apply if you repay your loan earlier than expected.
Our early repayment charges apply for the first eight years of the initial advance, cash reserve facility withdrawal or further advance.
Our early repayment charges are fixed so you know exactly how much it will cost. Our charges are set out in the tables below.
Interest Select Options
|Year loan repaid (end of year)||Early repayment charge (percentage of total loan)|
Early repayment waivers
We know that sometimes life changes and you may want to repay your mortgage. That’s why we offer two waivers:
- Downsizing protection - if you decide to downsize after five years, you won’t need to pay an early repayment charge
- Early repayment waiver for joint borrowers - you won’t need to pay an early repayment charge if you decide to repay the lifetime mortgage within three years of the date that the first borrower dies or goes into long-term care
We also won’t charge any fees where:
- Repayment takes places after your death or the death of the remaining borrower
- You or the remaining borrower move into long-term care. This applies to main residence properties only.
- The early repayment charge term has expired
- You sell the property and transfer the mortgage to another suitable property
You will always own your home and be responsible for maintaining it, as long as you follow the terms and conditions of the mortgage.
You’ll be able to live in your home until you die or move into long-term care, as long as you follow the terms and conditions of the mortgage. Your home will not be repossessed if you don’t make payments.
Fixed interest rates
Your mortgage interest rate will remain fixed for as long as you have it. We also apply fixed interest rates to any additional borrowing. The rate for additional borrowing is set at the time you apply and can be different from the initial loan interest rate.
You can choose to protect a percentage of the eventual sale value of your home at the start of your loan. The percentage you choose to protect is guaranteed to be available to you or your beneficiaries in the future. We won’t charge you for this.
Option to move home (porting)
If you want to move home, you may be able to take the mortgage with you. This is known as porting. You’ll also keep the same terms and conditions if it meets our suitability criteria. If you move to a property of lower value, it may mean we’re unable to lend you the amount you currently owe. In these cases you’ll have to repay part of the loan.
Read our guide to porting.
No negative equity guarantee
When your property is sold and the proceeds after solicitors’ and estate agents’ fees are not enough to pay the amount you owe, we won’t ask you or your beneficiaries to pay the shortfall. Any amount left over from the sale of your property will belong to you or your beneficiaries, if your property is sold for more than the amount you borrowed.
We won’t charge you a valuation fee to set up this mortgage. You’ll still need to pay a completion fee, as well as solicitor and adviser fees.
View our charges.
As agreed with your financial adviser
£474 +VAT (estimated)
*You may also need to pay disbursements
A lifetime mortgage is a loan secured against your home. It will reduce the amount of inheritance you leave and may affect your tax position and entitlement to welfare benefits.
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