Interest Select

Interest rates

  Age 55 - 69 Age 70 - 74 Age 75+
Interest Select 6.60% 7.0% 7.20%

Unlike other Lifetime Mortgages, where no monthly payments are made, Interest Select has been developed for clients who wish to release equity but who are able to service either some or all of the debt (it may be that they are still working, or have a pension which more than meets their living costs).

With this product your client chooses how much interest they want to pay, from 1% to 100% on the loan (minimum £25 per month), and how long they want to pay the interest charged each month (for example, 1 year, 5 years or even up to the lifetime of the loan).

If your client has selected to pay part of the interest, then a two part loan will be set up for them. If they are paying all of the interest, then only the first part will be relevant.

1. The interest payment part.

Interest will be charged on this part of the loan at an agreed fixed rate for the interest payment period and the payments will be made to Stonehaven via direct debit from your client’s account. Interest payments are taken the 1st bank working day of the month.

At the end of their chosen interest payment period, your client stops paying the interest each month and from that date the interest is added to the loan and is rolled up as with the lump sum option. The interest rate at this stage is the same fixed rate disclosed at the outset of the loan.

Please note: Your client cannot extend the interest payment period and they cannot change the amount of interest that they are paying.

2. The interest roll-up part.

This part will be set up only if your client is not paying all of the interest. Interest on this part is charged at the fixed rate which is agreed at the start and added to the loan each month for the life of the loan. Your client makes no repayments on this loan during the life of the loan.

Stopping interest payments early

If your client stops paying the interest earlier than originally planned.

The interest roll-up part of the loan

  • This part of the loan remains unaffected and interest will continue to roll-up at the original agreed rate

The interest payment part of the loan

  • We will immediately stop your clients monthly direct debit. The interest payment part of the loan will switch to an interest roll-up loan and the interest rate charged on it will switch to a new rate
  • The new interest rate will be set between the original product rate and the prevailing rate charged to new customers at the time. It will also be dependent upon the outstanding balance and the sum of the interest payments your clients have left to make
  • This new interest rate will be fixed for the life of the loan and interest will be added monthly to the outstanding balance until your Lifetime Mortgage is repaid
  • Your client will also be charged an administration fee at our then standard rate as set out in our tariff of charges for the change

In order to make this early switch your client must contact us directly and we will provide confirmation of the terms of the new interest rate.

If the interest payments are still being made upon the death of the client (or the last surviving borrower) the loan will revert to the roll-up rate until repayment.

Your client’s home will never be repossessed if they cannot keep up the interest payments.

Interest Select LTVs
Age 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72
Max LTV available (%) 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Age 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90
Max LTV available (%) 33 34 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35

Exceptions:

The LTV may be adjusted in certain circumstances, such as sheltered accommodation or non-standard construction types.

Go to our Maximum Loan Calculator to find the maximum amount your client can borrow and the interest rate they will be charged.

Other information

Applicants

1. Minimum age (for the younger borrower)

55

2. Maximum age (for the younger borrower)

90

3. Status

Available on both single or joint-life basis. Joint borrowers do not need to be married and may be of the same sex. If the property is in joint names then both owners must apply for the loan.

Property

4. Location

England or Wales

5. Minimum property value

£70,000

6. Maximum property value

Maximum value of £2m in Greater London & SE, or £1m elsewhere (may be exceptions)

7. Type

See our Lending Policy 'Acceptable properties and applicants.'

Cash advances

8. Minimum initial advance

£20,000

9. Maximum initial advance

£500,000

10. Charges

See 'Our Costs'

Protected Equity Option

With all Stonehaven lifetime mortgages your client can choose to protect a percentage of the eventual sale value of their home. The No Negative Equity Guarantee and the amount that Stonehaven will lend are based on the value of the unprotected portion of the property.

If, in the future, your client wants to reduce the amount of equity protected in order to apply for further borrowing, then the following should happen:

  • If your client originally took out an Interest Select product and protected some of their equity, they must apply for additional borrowing through their financial adviser. Stonehaven will not charge for reducing the protected equity option, however the normal charges and conditions associated with additional borrowing will apply.

Please note that the above scenario may impact your client's beneficiaries and the implications should be explained to your client.