Partnership launches care fees mortgage
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Partnership has launched a new lending product in a bid to help people pay for care without having to sell their home.
The care plan payment option is a form of mortgage with interest being calculated daily and added to the outstanding loan monthly.
The CPPO is used to purchase a Partnership care plan, which provides a level of guaranteed income for the life of the policyholder.
The loan and all interest and charges are payable upon the sale of the home at death or if it is sold beforehand.
The fixed rate of interest is 6.99 per cent. The firm says this is based on the typical rate for equity release products in the market.
The product comes with a no negative equity guarantee to ensure the repayment required will never be greater than the proceeds from the property sale.
The property owner is free to rent out the property once the CPPO loan has completed or return home if necessary.
Managing director of care Chris Horlick says: “For many, the most realistic way to fund care home fees is through the sale of the family home.
“Partnership’s new product has been developed to enable a property owner to meet care costs while maintaining the peace of mind that many associate with property ownership.
“We believe this is another welcome development in the care market, which is expected to grow significantly.”
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Readers' comments (2)
Julian Stevens | 12 Jul 2010 2:32 pm
Sounds like a good idea, though to a non-mortgage adviser like me it looks, really, like not much more than a conventional ER product with a few tweaks.
Still, good luck to them for being the first to launch such a product with LTC in mind.
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Simon Chalk | 12 Jul 2010 3:08 pm
I have been asking providers for a hybrid Equity Release - Care Fees product for several years so this is welcome news indeed. It is aimed at the right age group over 80 years and the the absence of any early repayment charge is an unexpected bonus.
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