Here’s everything you need to know about our Second Home Options – key features, how it works, helpful links, guides and brochures.
Our Second Home Options
Unlock cash from your second home with our flexible lifetime mortgages. With our Second Home Options, you can choose to repay up to 10% of your loan each year or let the interest build with no monthly repayments.
Second Home Voluntary Select Options
Our Second Home Voluntary Select Options allow you to make voluntary payments of up to 10% of the initial loan amount each year, without any early repayment charges.
For example, if you decide to borrow £30,000, you can choose to pay back up to £3,000 each year without any penalties.
You choose when to make payments and how much you’d like to pay back, up to your annual allowance. The minimum payment is £50 each year and a minimum loan balance of £10,000 is required.
- The annual allowance is 10% of the initial loan amount. This is the amount you can repay in one year without charges
- Your annual allowance starts on the day your mortgage completes and ends a year later on the day before your completion date. For example, if your mortgage completes on 1 July, your annual allowance starts on 1 July and finishes on 30 June the following year
- If you don’t use your full allowance, it won’t roll over into the following year. For example, if you repay 5% in year one, your allowance won’t increase to 15% in year two
- You choose when to make payments
- We accept payments from the first day your mortgage completes
- You can make as many payments as you like up to your annual allowance and there’s no maximum number of payments
- You can continue to make payments if you borrow more money at a later date
- You can make voluntary payments by standing order, bank transfer or debit card
- We’ll send you a standing order form when your mortgage completes and full details of your other payment options
There’s no penalty if you choose not to make a payment. We’ll add the interest to your outstanding loan balance each month.
If you would like to take more money at a later date, you can apply for a further advance.
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
If you have a Second Home Options lifetime mortgage, 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. Please read your Offer Letter carefully to understand how interest will affect the size of your loan in the future.
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 or further advance.
Our early repayment charges are fixed so you know exactly how much it’ll cost. Our charges are set out in the table below.
Second Home Options
|Year of repayment (end of year)||Percentage of the borrowing payable|
We also won’t apply an early repayment charge where:
- Repayment takes places after your death or the death of the remaining borrower
- The early repayment charge term has expired
- You sell the property and transfer the mortgage to another suitable property
- You stay within your 10% annual contribution allowance
You will always own your second home and be responsible for maintaining it, as long as you follow the terms and conditions of the mortgage.
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.
Option to move property (porting)
If you want to move property, 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 the property is sold for more than the amount you borrowed.
We won’t charge you a valuation or completion fee to set up this mortgage. You’ll still need to pay solicitor and adviser fees.
View our charges.
|Advice fee||As agreed with your financial adviser|
|Legal fee*||£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.