The equity release schemes of Stonehaven make it possible for those who are older than 55 years to obtain an additional source of capital to support themselves in retirement by taking out a lifetime mortgage secured against their property. In exchange, the home owner needs to pay a certain amount of interest to Stonehaven each month until death or moves into long term care.
Stonehaven interest rates have been decreasing since 2011 due to the fact that the equity release market is becoming more competitive due to other providers such as Aviva and Just Retirement vying for the lowest interest rates. However, the lowest interest only lifetime mortgage rate is offered by Stonehaven at 6.13% per month, which for a mortgage of £25,000 results in a monthly payment of just £128. Since the interest rates of Stonehaven are fixed for life, this will be a guaranteed monthly lifetime payment that a pensioner will have to pay for the rest of their days.
The product of Stonehaven that offers 6.13% interest per month is known as the Interest Select Lite and is available for homeowners who have good sources of income and are able to repay a certain amount of interest during their lifetime. Homeowners are allowed to choose how much of the interest amount they wish to pay and for how long. This is classed as a 'contribution' towards the payment & is unique in the mortgage industry. The minimum monthly repayment is just £25, with the maximum being the whole interest amount charged.
If homeowners decide to pay a part of the interest instead of the full interest amount, Stonehaven will set up what is called a two-part loan which will include the interest payment part and the interest roll-up part. The interest payment part charges interest based on a fixed rate for the interest payment period their choice. This could be specified number of years to coincide with a certain event such as planned retirement, or payable over their lifetime. If a fixed term has been selected & has now expired, they will no longer need to make interest payments. From that point, instead the interest charged will be added to the loan amount and will be rolled-up. Please note that it is not possible to change the amount of interest they agreed to pay or the interest payment period.
The interest roll-up part will continue to use the fixed interest rate to calculate the interest amount but that amount will be added to the loan amount on a monthly basis. Homeowners will no longer be able to make any other repayments. When they die or move into long-term care, the initial loan amount and the rolled-up interest amount will be repaid, usually upon sale of the property.
Experts in this field are companies such as EquityReleaseSupermarket.co.uk who are national equity release advisers & can be contacted on 0800 678 5159.