Saga Equity Release Plan
The Saga Equity Release Plan is a lifetime mortgage that provides flexibility and choice over how your home can provide for you. With this product, you can make equity release work the way you want it to.
What is the Saga Equity Release Plan?
The Saga Equity Release Plan is available for customers 55 and over, with a home of standard construction in the UK worth at least £70,000. The product can provide a one-off lump sum or you can choose to borrow a smaller amount initially and then borrow additional amounts at a later date from your pre-agreed cash facility.
The monthly payment option is available to those aged 80 or younger at application.
Equity release will reduce the value of your estate and may affect your entitlement to state benefits.
The Saga Equity Release Advice Service
Deciding on whether equity release is right for you is understandably a big decision. You’ll want to be sure that you’ve considered all the facts and looked into your options with someone you can trust to act in your best interests. That’s why we’ve partnered with HUB Financial Solutions Limited to bring you the Saga Equity Release Advice Service.
Your adviser could help you decide if equity release is right for you and will tell you if the Saga Equity Release Plan suits your needs. If the plan is suitable there are no set-up costs or valuation fees to pay. Plus, you’ll get £425 towards your legal fees. If your legal fees are more than this then you'll need to pay the difference.
Other products may have set-up, valuation and legal fees, and these vary depending on the provider and the type of product you choose. With a lifetime mortgage, you can add some of the fees to your loan which could reduce upfront costs.
The Service offers a free no-obligation consultation, however, if you choose to proceed with a recommended product, an advice fee of £750 is payable on completion. It’s worth remembering that if you are a Saga Possibilities member you’ll benefit from not having to pay an advice fee upon completion.
How it works
The Saga Equity Release Plan is a loan secured on your home, designed to be paid off from the proceeds of selling your house when you die or move permanently into long-term care.
You can choose how you take the money:
• Take a lump sum in the form of a one-off cash payment.
• Access to a cash facility where you can set up a pre-arranged cash facility that gives you the flexibility to draw cash as necessary. You can enjoy your retirement safe in the knowledge you can access extra money when you want to. By taking the money as and when you need it, rather than in one payment, it’s likely that the overall amount of interest charged will be reduced.
If you select the monthly payment option you can choose to pay off the monthly interest from £25 a month, up to all of the monthly interest. Not only will this reduce the overall cost of your loan, but you’ll also receive a reduction on the roll-up interest rate. The higher the percentage of interest you choose to pay each month, the bigger reduction you’ll receive.
Want to find out more? You can request our essential guide to equity release here.
Interest service option
The example below shows how interest accumulates on the Saga Equity Release Plan over a 20-year period comparing roll-up interest to other interest payment options now available. It's based on a 68-year-old borrowing a lump sum of £78,000 (on a property valued at £260,000).
Your questions answered…
The amount you can borrow depends upon your age and property value. The minimum lump sum you can borrow is usually £10,000 but with the monthly interest option the minimum is £20,000. The maximum you can borrow is £800,000 in England and £250,000 in Northern Ireland, Scotland and Wales.
Paying back equity release relies on your property being sold in the future. Lenders tend to prefer standard homes that can be easily resold without any refurbishment or issues that would put off prospective buyers if they need to get a mortgage. According to the Equity Release Council, these are the sort of properties that might not be eligible for equity release: studio or basement flats, flats or maisonettes in a local authority or housing authority block of more than four storeys, retirement properties, static/mobile homes, houseboats, farms, hotels and guest houses/B&Bs. There may be other types of property that do not qualify. To find out more call 0800 096 7120.
If you would like to take a temporary break from your monthly payments, you can take a payment holiday of up to three months in any 12 month period after the completion of your loan. You just need to give us at least a month’s notice.
You can stop making monthly payments at any time by giving us a month’s notice. However, once you have stopped you can’t restart them and your loan will then change to a full roll up of interest basis for the rest of the term. The interest rate discount will no longer apply so interest will accrue at the standard rate.
An early repayment charge is a charge that you may have to pay if you pay back all, or part, of your lifetime mortgage early. An early repayment is usually considered to be any time before the end of the customer’s life or before they have to move into permanent long-term care.
With the Saga Equity Release Plan, you do not have to make any monthly repayments. However, if you are not paying some or all of the monthly interest, you can choose to repay up to 10% of each advance in each 12 month period after the completion date of the advance.
If you are borrowing jointly, you can fully repay the mortgage within three years of one of you dying or moving into permanent long-term care without early repayment charges applying.
Just has a separate guide to explain the early repayment charge in greater detail. Please speak to your equity release adviser if you would like a copy of this document.
Some benefits may be affected by the decision to release equity in your home as they are subject to means testing, such as Pension Credit, Council Tax Reduction and health benefits.
You should make sure you have all the facts before you decide to proceed. Your specialist adviser will carry out a full state benefits review to ensure you’re claiming everything you’re entitled to and will explain whether releasing equity will affect your entitlement to means-tested benefits.
Information about Saga Personal Finance and our providers
The Saga Equity Release Advice Service is provided by HUB Financial Solutions Limited who will pay us an introductory fee if you decide to take out a product. The Saga Equity Release Plan is provided by Just. Just is a trading name of Just Retirement Money Limited. Saga Personal Finance is a registered trading name of Saga Personal Finance Limited, which is registered in England and Wales (Company No. 3023493). Registered office: Enbrook Park, Sandgate, Folkestone, Kent CT20 3SE. Saga Personal Finance Limited is authorised and regulated by the Financial Conduct Authority.
HUB Financial Solutions Limited and Just Retirement Money Limited, both part of Just Group plc, are authorised and regulated by the Financial Conduct Authority.