Brendan Burgess
Founder
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Please note that the rates quoted are out of date, so check them before you enter any contract. The Financial Regulator brought out a guide in February 2006 which would be worth consultin
A comparison of Life Loans for elderly people
This post covers loans only and does not cover residential reversions, where people sell a part of their home. The pros and cons of these products are discussed
SeniorsMoney 60 Plus loan
This is the best product if there is a chance that you may be able to repay it at some stage in the future.
Interest rate is 5.44% variable. Do they give a guarantee that they will track the ECB rate? This compares to a fixed rate of 6.35% for SHIP and a fixed rate of 5.5% for Bank of Ireland. Interest rates are expected to rise so the Seniors Money product will become dearer than Bank of Ireland and may become dearer than SHIP.
Minimum loan: €20,000
Maximum loan: €500,000
You get approval for a loan at the outset, but you don’t need to draw it all down at the one time. For example, if you are aged 70 and you have a house worth €500,000, you will get approval for a loan of €125,000. If you only need to borrow €20,000, then that’s all you borrow. If you need another €20,000 in three years’ time, you get it automatically.
This is an important distinction as otherwise, people borrow a large lump-sum at a high interest rate and put it on deposit at a low interest rate.
Costs €1150 to set up and €100 for drawing down more approved money. The €1150 covers “independent” legal advice. I don’t understand this as my solicitor could charge me anything? Will they refund whatever my solicitor charges?
You can repay the loan at any time. So, for example, if your children are in a position to lend you money in a few years, they can do so and you can repay the loan. Bank of Ireland and SHIP don’t allow this.
There is a regular income version available, but there are no details.
SeniorsMoney is not regulated by the Financial Regulator in Ireland, although it is subject to the Consumer Credit Act. Check this out?
Bank of Ireland Life Loan
Minimum loan: €20,000 ( Banking365 suggested it was €5000?)
Maximum loan: €250,000
Interest rate: 5.5% fixed for 15 years
Initial charges: Your own legal fees and surveyor's fee - c. €1000
This is a better product if you want a larger amount of money and you know that you won’t want to repay it as the lowish rate is fixed for 15 years.
Downsides:
You can’t repay it until you die or move out of your home permanently.
They will provide top-ups. You can use your own solicitor, or you can use the Bank of Ireland in-house legal team at a cost of €220.
Bank of Ireland is regulated by the Financial Regulator.
SHIP
Minimum loan: €25,000
Interest rate: 6.35% fixed for the life of the loan
Initial cost of set up: You pay your own legal fees and valuation fee – c. €1000
In practice, you can’t repay it until you die or move out of your home permanently
Early repayment: Possible, but not advisable as it is subject to early repayment penalty.
What’s the story with top-ups?
SHIP is not regulated by the Financial Regulator in Ireland, although it is subject to the Consumer Credit Act.
A comparison of Life Loans for elderly people
This post covers loans only and does not cover residential reversions, where people sell a part of their home. The pros and cons of these products are discussed
SeniorsMoney 60 Plus loan
This is the best product if there is a chance that you may be able to repay it at some stage in the future.
Interest rate is 5.44% variable. Do they give a guarantee that they will track the ECB rate? This compares to a fixed rate of 6.35% for SHIP and a fixed rate of 5.5% for Bank of Ireland. Interest rates are expected to rise so the Seniors Money product will become dearer than Bank of Ireland and may become dearer than SHIP.
Minimum loan: €20,000
Maximum loan: €500,000
You get approval for a loan at the outset, but you don’t need to draw it all down at the one time. For example, if you are aged 70 and you have a house worth €500,000, you will get approval for a loan of €125,000. If you only need to borrow €20,000, then that’s all you borrow. If you need another €20,000 in three years’ time, you get it automatically.
This is an important distinction as otherwise, people borrow a large lump-sum at a high interest rate and put it on deposit at a low interest rate.
Costs €1150 to set up and €100 for drawing down more approved money. The €1150 covers “independent” legal advice. I don’t understand this as my solicitor could charge me anything? Will they refund whatever my solicitor charges?
You can repay the loan at any time. So, for example, if your children are in a position to lend you money in a few years, they can do so and you can repay the loan. Bank of Ireland and SHIP don’t allow this.
There is a regular income version available, but there are no details.
SeniorsMoney is not regulated by the Financial Regulator in Ireland, although it is subject to the Consumer Credit Act. Check this out?
Bank of Ireland Life Loan
Minimum loan: €20,000 ( Banking365 suggested it was €5000?)
Maximum loan: €250,000
Interest rate: 5.5% fixed for 15 years
Initial charges: Your own legal fees and surveyor's fee - c. €1000
This is a better product if you want a larger amount of money and you know that you won’t want to repay it as the lowish rate is fixed for 15 years.
Downsides:
You can’t repay it until you die or move out of your home permanently.
They will provide top-ups. You can use your own solicitor, or you can use the Bank of Ireland in-house legal team at a cost of €220.
Bank of Ireland is regulated by the Financial Regulator.
SHIP
Minimum loan: €25,000
Interest rate: 6.35% fixed for the life of the loan
Initial cost of set up: You pay your own legal fees and valuation fee – c. €1000
In practice, you can’t repay it until you die or move out of your home permanently
Early repayment: Possible, but not advisable as it is subject to early repayment penalty.
What’s the story with top-ups?
SHIP is not regulated by the Financial Regulator in Ireland, although it is subject to the Consumer Credit Act.