Hodge Lifetime opened its doors to equity release schemes in 1965. The company has successfully offered retirement products to homeowners since the beginning. Almost every year they have received an award for their financial and retirement products. Hodge Lifetime does not sell directly to consumers, but via qualified, equity release advisers who are able to compare equity release products to help their clients. For retirement products Hodge Lifetime has three lifetime mortgages, all with different benefits and features.
Type of Plans
Hodge Lifetime offers a lump sum lifetime mortgage with a tax free amount of cash awarded at the time of paperwork completion. This sum is a one-off payment with no further withdrawals. They also have a drawdown lifetime mortgage with flexible voluntary repayments. This loan provides a small initial lump sum with an option to take future withdrawals as & when required in the future.
Both will start off with similar fixed interest rates. The drawdown mortgage will have a fixed rate on future withdrawals, but it will be a current rate of interest, which may not be the same as the original lump sum taken. The future withdrawals must be in increments of £1,000 for which there are no further admin costs.
For both plans homeowners must be 60 years of age up to 85 years old. The minimum property value is £100,000, with a maximum amount of £1 million. The lump sum plan requires a minimum loan amount of £20,000; while the drawdown option is £15,000. Both have a maximum amount of £500,000. Final repayment of the lifetime mortgage is made upon death or moving into long term care of the last person surviving.
Options to Add to Equity Release
Both the lump sum and flexible lifetime mortgage include flexible repayment options. These options allow the homeowner to repay up to 10% of the initial amount borrowed without an early repayment charge. This is 10% per annum. For the drawdown mortgage the 10% can include further withdrawals.
They also provide downsizing protection in the event a homeowner needs to sell the home or move to a different property. There will be no early repayment charge if this situation arises 5 years after the initial sum is borrowed. This penalty is stepped from 5% in year 1, down to zero after year 5 upon downsizing.
If repayment involves staying in the same property it does not meet the no early repayment qualifications & the fee is a maximum of 25% of the capital repaid by the homeowner.
Protection under the Government
Hodge Lifetime provides legal and regulated products via independent equity release advisers. These products adhere to the Equity Release Council and Financial Conduct Authority. In particular the products include a no negative equity clause to prevent any lender from requiring assets beyond the home’s sale value.
Hodge Retirement Mortgage
Hodge have now launched their own Retirement Mortgage plan. At a time when mortgages for pensioners have been extremely difficult due to the MMR interventions, Hodge have broken the mould.
Based on retirement income, rather than purely age & property value, The Hodge Retirement Mortgage will lend upto 50% of the property value from the age of 55, should income support this figure. Plans start at age 55, with a maximum age at entry of 70. The minimum property value is £100,000 & must be situated in England, Scotland or Wales.
Payments of interest only are made & must be maintained for the duration of the plan term, or upto at least age 80. At this point a decision can be made as to whether to continue on an interest only lifetime mortgage basis, or cease making monthly payments of interest altogether. This will then result in the roll-up of interest with an escalating balance.
The Hodge Retirement Mortgage has a 5 year fixed rate, which becomes variable thereafter. A choice of whether to fix again or remain on a standard variable rate can be made at that time depending upon personal preferences. As a consequence of the 5 year fixed rate, the early repayment charges are set to reflect this. Hodge apply a 5% penalty if repaid in year 1, reducing down to 1% in year 5, which is ideal for retirees looking to repay the balance in the future.