Equity Release News

Understanding Stonehaven Hybrid Equity Release Scheme


Today, it is very difficult for people in retirement to obtain a mortgage to finance their daily needs.  However, Stonehaven offers a hybrid equity release scheme for those in retirement. This equity release scheme is called a hybrid equity release scheme because clients are not required to repay the capital amount during the duration of their lifetime. Instead, the interest is the only element to be repaid. The client is also given the opportunity to select how much of the interest he wants to repay.

There is of course a minimum interest amount that needs to be repaid. This amount is £25 per month. There is no maximum amount. The client can choose to pay any amount above £25 and can go up to the full interest amount charged. If, however, the full amount of interest is not charged then an element of roll-up equity release will be made. This will result in a partial increase in the outstanding capital, albeit at a lower rate than if NO monthly interest was paid.

Basically, whenever you do not pay the full interest for each month it is going to be added to the principle amount. This is like standard lifetime mortgages because any time you do not pay interest it is always going to accrue on any unpaid balance. The difference with interest only choices is that you are making some payments in an effort to keep the overall balance lower.

The important factor about this plan is that you must make a small payment whether you can afford the full payment or not. It requires a bit of disposable income each month and of course the more you pay the less is left on the loan at the time of your death or when you decide to sell your home. It is a great way to keep your balance lower than with other products on the market.

Stonehaven is a member of SHIP and is regulated by the FCA (formerly FSA). SHIP stands for Safe Home Income Plan which is the authoritative body that is dedicated to the protection of equity release clients. This means that retired people do not have to worry about being cheated by Stonehaven. As a member of SHIP and by following the regulations enforced by the Financial Conduct Authority, Stonehaven is required to make sure that its clients are treated fairly.

The hybrid equity release scheme offered by Stonehaven is known as the Interest Select Plan and it was developed for retirees who can afford to pay some of their debt during their lifetime. These are people who most likely have a pension which is more than enough to meet their daily living costs.

Another great thing about the Interest Select Plan is that clients can also determine for how long they want to pay the monthly interest amount. They can choose to pay it for only one year, a few years or even for the full lifetime of the mortgage.

The above discussed product is not the only one available from this company. You also have other products you can compare on the market from different providers. While this one has been explained to you here, it is because of the benefits and the trustworthiness of the company under the SHIP and FCA regulations. There are certainly other companies that can offer you this same security. You also have different plans that may work better for you. The roll-up plan, which is part of this hybrid mortgage, can also be taken out as a true roll-up scheme.

You could decide you do not wish to pay any interest until the end of the agreement. If this is the case you just need to choose the product with the best option in interest. A comparison can help you with this.

Speaking with a financial adviser is another way to learn about the various mortgages on the market for retirees. An independent financial adviser can explain the pros and cons of all the products on the market from lifetime mortgages to home reversion plans. It is in your best interest to figure out what is better for you and to include your family in the decision. Your retirement mortgage will affect your family too.

When a client chooses to pay only a part of the interest amount, a two-part loan is set up for them. Allow Stonehaven to explain the details in full and examine your situation, if you wish to learn more or speak with an independent adviser to see if there is a better plan than the Interest Select Plan.