These are loans available only to those over 60 years of age who own their home. You are able to borrow a percentage of the value of your house and have no obligation to make regular repayments during the term of the loan when you are likely on a fixed income. Instead compounding interest accrues on the loan (where interest is charged ON the interest you have already accrued). The interest rates are generally considerably higher than on a “normal” loan to take into account the cost to the lender of not receiving any funds from you for what could be a long time.
The loan and interest are repayable when you stop living in the home, either due to your death, move into care or sale of the property.
Borrowers must have legal advice from a lawyer independent of the lender due to the potentially high cost of the loan. These loans can quickly balloon from a small to a considerable debt simply due to the high interest rate and the duration of the loan.
We can advise you on the nature of the loan, the equity that may be available to your family after your death and how to minimise the debt in simple, clear language that we'll make sure you understand.