Update on Spry Finance's Lifetime Loan

[Brendan Burgess]

Interesting article here:

Explainer: What's a lifetime loan and how do they work?

Many older people will consider themselves asset rich, cash poor.

www.rte.ie

The rate has gone up to 6.45% fixed for the life of the loan.

Spry Finance has written 400 loans here in Ireland worth €70 million since it relaunched back in January 2021.

It said 25% used the money to enhance their lifestyle, to provide extra monthly income or to fund emergencies.

Another quarter used the funds to carry out home improvements or to buy things for their home, while a further 25% paid off debts, such as their mortgage or credit cards.

10% said they gifted the money or gave it to their children as a living inheritance, while the remaining 15% used the funds for other purposes.

 

[Cervelo]

Saw that this morning alright and what I found interesting is "The amount you can borrow will depend on your age and the value of your home".
And in particular this line "The amount you can borrow increases by 1% every year, up to 40%".
Which got me to thinking is there a product out there that would release a certain percentage of the value of your house to you on an annual/monthly basis for a set period of time
Using a person, at 65 years and house valued at €750k and would like €12k equity release per year for the next 20 years, as an example??

 

[Mark Coan]

The lifetime loan product currently available from Spry doesn't allow you to do that currently although I believe it's in the pipeline, in the UK these 'drawdown' equity release products already allow this . The Home Plus home reversion product does in theory allow this, where in effect you sell a proportion of your home each year, however due to the fixed costs involved this might not be viable.

I did a podcast interview earlier this year with Ian Higgins the Home Plus CEO where we discuss this available here and another with Aidan Horgan the Spry CCO here.

In the right circumstances these can be very useful products and are somewhat under used in the Irish market.

In the podcast we cover the drawdown as an option for care home packages and explore using equity release to help gift children a deposit for a home, using for a home retrofit and lots of other interesting case studies. We also cover the potential drawbacks. Might be useful for anyone thinking of equity release as an option, also have an article on equity release here that might also come in handy.

 

[Brendan Burgess]

is there a product out there that would release a certain percentage of the value of your house to you on an annual/monthly basis for a set period of time

Hi Cervelo
That is why I was so incensed at the hatchet job Joe Duffy did on this product.

In the UK, there are many providers with many different product options.
Here , we have only one provider of a loan product and only one product.

It would be much better if people appreciated the benefits of them and the main banks also provided them.

Brendan