What is a Lifetime Loan?
A Lifetime Loan is another name for equity release. A Lifetime Loan allows people over 60 to release value from their homes, at an interest rate fixed for the duration of the loan. It is a valuable financial planning tool for people aged 60 and over who own their own home and wish to release a lump sum from their asset. At the moment, Spry Finance are the sole provider of Lifetime Loans in Ireland.
What is a Lifetime Loan used for?
A Lifetime Loan is most commonly used for the reasons below:
1. Cash fund for lifestyle maintenance and ‘rainy day fund’
2. Re-financing loans e.g., mortgages & other debts
3. Home improvements/purchases for the home
4. Cars and holidays
5. Deposit for your children for their own home
Note: You still own your home
The borrower continues to own their home, and the loan becomes repayable when the property is sold or within 12 months of the borrower’s death.
What is an Equity Release Scheme?
Equity is the difference between the current value of your house and the amount you owe on it. For example, if your home is worth €400,000 and your mortgage is €100,000, then you have equity in your property of €300,000.
If you own your home, an equity release scheme could allow you to release some of the value of your home without having to make repayments during your lifetime, move out or sell your home on the open market. The conditions of equity release include that you cannot have an existing mortgage on your home and that you have reached a certain age, for example 60, to avail of the loan.
Key Features of a Lifetime Loan
A Lifetime Loan is a mortgage loan secured against your home. You do not sell a share of your home. You borrow a cash sum using your house as security. You can use this money as you wish.
This type of loan is designed to last for the rest of your life. There are no regular repayments to be made. It becomes repayable if you sell your home or after you die or permanently cease to reside in your home
- This is a loan secured against your home.
- You do not sell a share of your home.
- You retain full ownership of your home and continue living in it for as long as you wish.
- Regular repayments are not required.
- Interest is added to the loan balance monthly.
- The loan grows over time.
WARNING: WHILE NO INTEREST IS PAYABLE DURING THE PERIOD OF THE MORTGAGE, THE INTEREST IS COMPOUNDED ON A MONTHLY BASIS AND IS PAYABLE IN FULL IN CIRCUMSTANCES SUCH AS DEATH, PERMANENT VACATION OR SALE OF THE PROPERTY.
WARNING: PURCHASING THIS PRODUCT MAY NEGATIVELY IMPACT ON YOUR ABILITY TO FUND FUTURE NEEDS.
WARNING: YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER LOAN SECURED ON IT.
WARNING: YOU MAY HAVE TO PAY CHARGES IF YOU PAY OFF A FIXED-RATE LOAN EARLY.
If your Lifetime Loan is being used for debt consolidation purposes:
WARNING: THIS NEW LOAN MAY TAKE LONGER TO PAY OFF THAN YOUR PREVIOUS LOANS. THIS MEANS THAT YOU MAY PAY MORE THAN IF YOU PAID OVER A SHORTER TERM.
Start the Conversation
Planning for the unexpected to ensure your family are financially comfortable is what we do. The first step is a quick conversation to understand your circumstances and what you’d like for your family if something unexpected happened.
Arrange a quick conversation at a time that suits below.