Flexible Mortgage Option
Here's to a happy and active retirement
The Hodge Lifetime Flexible Mortgage Option is secured by a legal charge on your home and is repayable from the proceeds of the sale of your home. As well as an initial lump sum, it provides a pre-approved Cash Reserve facility, from which you can make further withdrawals.
What happens to the interest charged on the Flexible Option lifetime mortgage loan?
Interest is charged on the initial cash sum at a fixed rate current at the time of application. Interest for each withdrawal from the Cash Reserve is charged from the date of withdrawal and is fixed at the same rate as that being offered to new Flexible Mortgage Option customers. Interest is calculated daily and added to the loan each month. The total loan, including interest and any charges that have been added, is repaid from the proceeds of the sale of your property usually following your death or when you permanently vacate the property. A statement of your account showing the interest added to the loan will be issued each year.
Do I have to pay for my Cash Reserve?
There is no charge for your Cash Reserve facility and we do not charge for making withdrawals.
Do I have to pay any fees?
Yes, you will have to pay Hodge Lifetime a valuation fee when you submit your application and an application fee which is deducted from the cash lump sum we pay to you. If you do not wish to pay these fees upfront, then for properties up to the value of £250,000 there is a Fee Free Option, which means you do not have to pay the valuation fee or application fee. If you choose this option you will be charged a higher rate of interest on the initial cash sum and any future withdrawals from your cash reserve, so you may end up paying more over the term of your loan.
For all lifetime mortgages, you will have to pay your own legal fees and may be charged a fee by your Financial Adviser.
How much can I withdraw from my Cash Reserve?
The minimum withdrawal is £2,000. The maximum depends on your age and property value, and how much you have already borrowed.
When can I make withdrawals from my Cash Reserve?
You may make a withdrawal at any time from completion until the fifteenth anniversary of the plan. Within this time, you may make a withdrawal as often or as little as you wish. However, if your circumstances change, or you have any doubts about making withdrawals from your Cash Reserve, you should consult your Financial Adviser.
How much cash can be released?
The older you are the higher the benefit that can be released in relation to the value of your home.
Age of youngest applicant |
Max loan as a % of property value |
Age of youngest applicant |
Max loan as a % of property value |
|---|---|---|---|
| 55 | 15% | 71 | 31% |
| 56 | 16% | 72 | 32% |
| 57 | 17% | 73 | 33% |
| 58 | 18% | 74 | 34% |
| 59 | 19% | 75 | 35% |
| 60 | 20% | 76 | 36% |
| 61 | 21% | 77 | 37% |
| 62 | 22% | 78 | 38% |
| 63 | 23% | 79 | 39% |
| 64 | 24% | 80 | 40% |
| 65 | 25% | 81 | 41% |
| 66 | 26% | 82 | 42% |
| 67 | 27% | 83 | 43% |
| 68 | 28% | 84 | 44% |
| 69 | 29% | 85 | 45% |
| 70 | 30% |
Minimum property value = £100,000 (properties below this value will be considered on referral)
Minimum initial withdrawal = the greater of £10,000 or 15% of facility
Maximum facility = £250,000 (facilities above this value may be considered on referral)
Who is eligible for the Hodge Lifetime Flexible Mortgage Option?
- The Flexible Mortgage Option can be arranged for either one or more people, who own and live permanently in their own home, which is located in England, Scotland, Wales or Northern Ireland. Plans are available to couples, relatives or friends. N.B. Where there are two or more applicants, the property title must be held in joint names.
- The property must be in sound condition, of standard construction, and worth at least £100,000. If any essential repairs are identified when the property is inspected, release of the initial cash sum (or an appropriate part of it) may be withheld until they are complete.
- If the property is leasehold, there must be at least 75 years left to run on the lease.
- If there is an outstanding mortgage or charge, it must be low enough to be repaid from the cash sum expected at completion, unless redeemed earlier from your own funds.
Commercial property, freehold flats, sheltered (or wardened) units, prefabricated concrete panel or mobile homes are not acceptable. All other types of property are subject to Hodge Lifetime being satisfied as to the nature of the property and its ownership.
Can additional borrowing be arranged?
Additional borrowing from your Cash Reserve has already been approved and withdrawals may be taken as previously described.
After the third anniversary of the plan, you may apply to increase your Cash Reserve, subject to our lending criteria at the time. We will need to review your plan, including revaluing your property. Applications for such additional borrowing must be made via your Financial Adviser.
Loan Repayment
Can the Flexible Mortgage Option loan be repaid
at anytime?
If you wish, this lifetime mortgage loan and interest may be repaid in part or in full at any time. If this is within five years of taking out the plan, Hodge Lifetime will make an early repayment charge of 5% of the capital amount repaid. Between years six to ten, an early repayment charge of 1% of the capital amount repaid will be made. For part-repayments where withdrawals have been made from the Cash Reserve, loans will be repaid in order of those with the highest interest rate first.
The early repayment charge will be waived if you repay this lifetime mortgage loan after moving into long-term care on medical or other specialist advice.
What about moving house?
You will be free to transfer your lifetime mortgage to a new home of your choice, so long as it provides adequate security for the equity release plan. If the loan and the interest you owe is more than the amount you are eligible to borrow on the value of the new home, you may need to repay part of your existing loan from the sale proceeds. No early repayment charge is made in this event. If you move to a higher value home, no repayment will be necessary. You will also be responsible for any costs related to the transfer, including our Solicitors' fees for work which they will need to carry out, even if the move falls through.
What would happen to the Flexible Mortgage Option if I married (or re-married) in the future?
If a single plan holder marries, it may be possible to revise the terms of this lifetime mortgage to give the new partner a right of occupation. The new occupant will need to meet the age requirement for the plan and, if younger than the plan holder, a part-repayment may be due. This will be calculated by taking into account the amount of the loan and interest outstanding. If a right of occupation is not arranged, the new partner will have to sign an agreement to vacate should the plan holder die or move out permanently.
What happens when the property is vacated, or I die?
You, or your personal representatives, should arrange for the sale of the property as soon as it is clear that your occupation of the property has ceased. Interest will continue to be added to the Flexible Mortgage loan until it is repaid. To avoid the risks associated with vacant property and the accumulation of interest, the earlier it is sold, the better.
The lifetime mortgage loan, interest outstanding, plus any fees and expenses related
to the sale which are due to Hodge Lifetime will be payable from the sale proceeds.
The balance of the sale proceeds will remain with you or form part of your estate.
Should your absence be due to an extended holiday, or a term of hospital care, for example, Hodge Lifetime would only require your confirmation that the property
would be adequately secured during this period.
The lifetime mortgage loan and interest will become repayable if you leave the
property for longer than six months without our written agreement.
What if the value of my property doesn't cover what I owe at the end of the plan?
Hodge Lifetime give a watertight guarantee that if the proceeds from the
sale of your property are insufficient to pay off your liability, no further sum will be payable. This will ensure that no outstanding mortgage debt is left to you, or to your estate.
This 'no negative equity' guarantee is provided free of charge.
Alternatively, if on the sale of your property the net proceeds are more than the outstanding balance on the loan and accrued interest on it, your estate will retain the surplus.
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