2 February 2006
Equity release product from Retirement Plus raises the stakes with higher advance rates
Retirement Plus announces that the maximum advance rates for Property Plan, its new equity release product, are being dramatically increased. They are now substantially in excess of lifetime mortgage maximums and are comparable to maximum amounts offered on reversion products - without the homeowners having to immediately sell their total interest in the property.
Head of Sales, Fred Paton, commented:
"We are delighted with the level of interest we've received. The Property Plan is already proving to be a vital alternative in the equity release market and, by raising the advance rates, we've just made it even more competitive."
Duncan Young, Chief Executive said:
"This is a significant new development which will help homeowners release more money from their property when they need to. Unlike reversions, we pay market value for the share of the property we purchase - so the customer now receives a real boost. And, we will be applying the new rates to all pipeline cases, too."
The Property Plan is available to men and women over 65. It is only distributed through intermediaries, because of Retirement Plus's insistence that the product should be bought with advice.
Illustration: A couple, aged 75, with a property valued at £250,000 can now raise about 15% more with Property Plan, compared with a leading lifetime mortgage provider and around the same as a leading reversion scheme provider. With Property Plan they are able to sell a 47.44% share of their property at the market value of £118,600.
In this example, if the homeowners took out a Property Plan, Retirement Plus would have a right to a 47.44% stake in the property in the beginning, which would increase at 0.45% per month. The homeowners would not surrender full ownership until almost 15 years after the Property Plan has been taken out. If they died or cancelled the Property Plan at any time before then, they would still own a share of the property, which would be repaid to them or their estate upon the sale of the property, after deduction of sale costs.
