Saga

Saga equity release review

In this review, you'll discover the key pros and cons of Saga equity release products.

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Saga is a UK-based financial services company, which focuses on meeting the needs of over-50s.

It offers a huge range of financial products, including The Saga Equity Release Advice Service. This service is provided by HUB Financial Solutions Limited and gives you all the information and advice you need about equity release.

The advisers will recommend the best equity release product for your needs. There’s no fee for this initial consultation, although you’ll pay £750 if you proceed with a recommended product.

There are two Saga equity release products that are available exclusively through this service. In the rest of this guide, you’ll learn how these Saga equity release products work and how they compare to others on the market.

What equity release products are on offer?

The two exclusive Saga products are:

  • Saga Equity Release Plan. A lifetime mortgage loan, which you can take as a single lump sum, or an initial lump sum followed by smaller payments later on. You can choose to pay some or all of the monthly interest on this loan, but there’s no obligation to make any repayments until after you die or move into long-term care.
  • Saga Regular Drawdown Lifetime Mortgage. A lifetime mortgage loan, which consists of an initial lump sum plus regular monthly payments. You’ll start paying interest on the money once you’ve received it, so the total amount owed is likely to be a lot less.

How does it work?

The amount you’re permitted to borrow and your interest rate will be based on your personal circumstances. This includes your age, the valuation of your property and the amount of equity you want to release.

Also, the more interest you choose to pay on your loan, the lower your interest rate will be. You can take a three-month payment holiday in any 12-month period.

Shortly after your loan is finalised, you’ll receive your initial lump sum. Interest begins to tot up from that moment. You’re only obligated to pay back the capital and remaining interest after you die or move into long-term care.

It is possible to make early repayments, but you’ll probably face an early repayment charge (ERC).

Is Saga equity release safe?

When you’re not making any repayments on your mortgage, interest can compound pretty quickly. That means there could be little left to leave to your loved ones after you die.

Having said that, lifetime mortgages are regulated by the FCA. You have to enlist the help of a financial adviser in order to be approved for one. Your adviser will make it clear what you’re getting into, and what product is best for you.

With all lifetime mortgages, you’re protected by a “no negative equity” guarantee, so you’ll never owe more than the total value of your property.

Eligibility criteria

  • You have to be aged over 55 to apply for the Saga Equity Release Plan or between 60-80 to apply for the Saga Regular Drawdown Lifetime Mortgage.
  • You’ll need to own a home in the UK, worth at least £70,000 to apply for the Saga Equity Release Plan or £150,000 to apply for the Saga Regular Drawdown Lifetime Mortgage.

How to apply

You start your application by calling The Saga Equity Release Advice Service on 0800 096 7120 for an initial consultation.

During this call, you’ll set up a no-obligation appointment with a financial adviser. You’ll only pay for this appointment if you go on to take out the product recommended to you.

Pros and cons

Pros

  • Your adviser will choose the best product for you. It may not be a Saga exclusive product.
  • You have the flexibility to draw down your loan over a longer time period.
  • You can choose to pay interest on your loan and receive a lower interest rate as a result.

Cons

  • Interest can compound quickly, leaving little for your beneficiaries after you die.
  • You can’t make an early repayment without facing an early repayment charge.

Saga customer reviews

Saga has received positive reviews from customers, according to review platform Trustpilot. It currently has a rating of 4.6 out of 5, based on more than 19,000 reviews (updated 12 April 2021). Many customers praised the straightforward process and easy to use website.

Our verdict

Saga offers so many useful services for over-50s, and this equity release advice service is definitely one of them. Your adviser will suggest the best equity release product for your needs, and there’s every chance that this could be one of the exclusive Saga products.

Frequently asked questions

We work with Age Partnership, one of the UK’s leading equity release specialists, which scours more than 500 deals to find the best equity release products. We compare only lifetime mortgages, and do not compare any home reversion plans. 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.

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