To understand the features and risks of lifetime mortgages, ask for a personalised illustration from a lifetime mortgage company. Check that this type of mortgage is suitable for your needs if you plan to move or sell your home or you want your family to inherit it. If you're not certain, seek independent advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
Hodge Lifetime equity release review 2021
This guide reviews the pros and cons of all Hodge Lifetime equity release products.
Table: sorted by the lowest AER.
What's in this guide?
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Hodge Lifetime is a UK lender specialising in products for older homeowners. It offers mortgages and annuities as well as lifetime mortgage products for those looking to release equity from their property.
What equity release products are on offer?
This provider offers two fixed-rate lifetime mortgage products:
- Lump Sum Lifetime Mortgage
- Flexible Lifetime Mortgage
There are variants of both of these products with no fee or a £595 fee.
The main difference between these products is that the Flexible Lifetime Mortgage allows you to make unlimited additional withdrawals (of at least £1,000). This product will have a higher interest rate attached though.
Interest rates
- Lump Sum Lifetime Mortgage. From 3.90-4.30%.
- Flexible Lifetime Mortgage. From 4.05-4.45%.
The rate offered to you will depend on a number of factors, including your age and property value. If you choose the version of this mortgage with a £595 product fee, you may be able to access a lower interest rate.
How does it work?
If the lender reviews your application and deems you eligible for a lifetime mortgage, it will get back to you with details of the lump sum and interest rate offered.
The maximum lump sum offered is £600,000.
The maximum standard loan-to-value (LTV) offered is from 15-48%, depending on the age of the borrower.
Interest will be charged monthly, based on the fixed interest rate, but you won’t have to pay it back until you die or go into long-term care. You’ll never have to repay more than the value of the property.
Early repayment options
Hodge Lifetime offers a lot of flexibility for those who want to repay their loan early.
With all of its products, up to 10% of the lump sum borrowed can be repaid per year with no early repayment charge.
You’ll also be spared an early repayment charge if your loan is repaid as a result of you downsizing your home.
In any other situation, you could face early repayment charges worth up to 25% of the amount repaid.
Additional cash withdrawals
With a Flexible Lifetime Mortgage, you can apply to make additional cash withdrawals of at least £1,000 whenever you like. The interest rate on these withdrawals will be 3.74% APR. The terms of early repayments are the same on these withdrawals (you can pay 10% of the lump sum per year without a charge).
Is Hodge Lifetime equity release safe?
Lifetime mortgages are safe in the sense that there’s no danger of you owing the lender more than the value of your property.
However, because there are no compulsory monthly repayments being made, there is a danger of your debt growing quickly, due to compound interest.
Seek financial advice before agreeing to a lifetime mortgage from any provider.
Eligibility criteria
- The applicant must be older than 55, but no older than 88.
- The property is valued between £120,000 and £1 million (or up to £2 million for London properties).
- You’re applying for a loan between £20,000 and £600,000.
- Your property is located in England, Wales and mainland Scotland only.
How to apply
Download the appropriate application form from hodgelifetime.co.uk, fill it out and send it to mortgages@hodge.co.uk (along with the requested supporting documents).
Pros and cons
Pros
- You maintain full ownership of your property and potentially benefit from future price growth.
- You can make early repayments worth up to 10% of the money borrowed per year with no early repayment charge.
- You can make an unlimited amount of additional cash withdrawals.
Cons
- Interest can compound quickly, leaving little for your beneficiaries after you die.
Our verdict
The early repayment terms offered by Hodge Lifetime allows it to stand out among its competitors. If you’re hoping to make early repayments on your lifetime mortgage, this provider is worth exploring.
Frequently asked questions
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.
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