Signs that the equity release market is beginning to spark into life again, can be evidenced by the re-emergence of a former lender in the market.
More2Life have joined forces with annuity specialist Partnership assurance to re-launch their impaired life roll-up lifetime mortgage plan.
Incorporating an impaired life facility & protected equity guarantee, the More2Life equity release plan can be seen to be opening a niche market for itself. The impaired life facility means that depending on health & lifestyle, a higher than normal tax free lump sum can be achieved, should serious health issues be present.
The More2Life equity release plan has been designed with three scenario’s in mind: –
1. Enhanced plus – industry leading maximum release, impaired life product
2. Enhanced protected – impaired life plan with ‘protected equity guarantee’
3. Protected plan – older applicants looking for a ‘protected equity guarantee’
Pitching the enhanced plus plan at the maximum release end of the market means that should the applicant qualify on medical grounds, they would have the highest lump sum currently available. This would even surpass the current Aviva Lump Sum Max product, although this would be at the expense of a higher interest rate with More2Life.
The following percentages are the maximum releases available on the Enhanced Plus: –
Age 55 23%
Age 60 28%
Age 65 33%
Age 70 38%
Age 80 48%
Age 90+ 54%
For example, an applicant aged 65 with a property valuation of £250,000 & meeting the underwriting criteria, can release a maximum of £82,500 on the enhanced plus plan.
The interest rate for this product will be 7.49% monthly.
The second product – ‘enhanced protected plan’ is also based on health & lifestyle grounds & again can provide an enhanced lump sum. However, to qualify for this equity release scheme the health situation will not be a serious as the enhanced plus. The interest rate for this plan is lower at 6.99% monthly.
Another feature of this plan is the ‘protected equity guarantee’ which is included & guarantees a percentage of the property for the children/beneficiaries on the eventual sale of the property.
The guarantee works as follows: –
Should the overall facility available be £80,000, yet only £40,000 is taken, then 50% of the final sale value will be protected on sale.
This can be an essential tool for applicants who wish to ensure that a guaranteed inheritance is passed onto their children.
The final option is the ‘protected plan’ which has no impaired life facility, but does include the protected equity guarantee. The interest rate is the same as the enhanced protected at 6.99% monthly.
In summary, depending on whether the maximum lump sum is being sourced, or one is looking to take equity release but still guaranteeing an inheritance for their children, then one of the three More2Life schemes can benefit.
Mark Greggs is the founder of Equity Release Supermarket who were recently accredited ‘Best Financial Advisers’ at the Equity Release Awards 2008. Mark is an experienced Independent Financial Adviser who has now been providing quality equity release advice for the past 8 years.