Financier launches new cash release scheme for retirees
LONDON: A financier has launched a new cash release scheme pitched at the retiree market.
Hampden & Co has launched a retirement interest-only product that allows clients to borrow up to £2m.
The private bank says that loan-to-values will typically be restricted to a maximum of 50 per cent but there is no limit to mortgage term.
It says the new product can help over-55s to manage their inheritance tax liabilities without disturbing other assets or raise a lump sum to support family and boost lifestyle in retirement.
Hampden in supporting clients with complex finances who typically fall outside the algorithm-driven lending approach of the mainstream banks
The loan amount is repayable on the sale of the property or when the last borrower dies or moves into long-term residential care.
Until that time, interest payments are charged and paid monthly.
This differs from lifetime mortgages offered by other lenders, where the interest is rolled up and compounded until the loan is paid.
Hampden & Co assesses a client’s ability to afford the monthly interest payments based on their actual and projected income and expenditure both leading up to and following retirement
The lender is able to consider all sources of income including investments and returns on rental properties.
Banking director Samantha Dunne says: “We know from our existing clients that the flexibility offered by this new service is something they have been looking for.
“Many people in their later years have a need to manage their estate planning, particularly in relation to inheritance tax liabilities.
“Others may simply want to realise a lump sum without disturbing other assets and investments.
“In both cases, the solution may be to raise funds against the value of their principal property.”
