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Halifax to pull retirement home plan

Halifax is to pull its retirement home plan.

The product, which is to be pulled on Wednesday, was marketed as an alternative to equity release and is aimed at those over 65.

Whereas an equity release balance will increase over time, the retirement home plan will stay at the same balance, with only the interest payments having to be met each month.

The maximum amount that can be raised is 75 per cent of the property’s value and the capital is repaid when the house is sold.

Halifax pulled the product from its branches a number of years ago and since then it has only been available through intermediaries.

A Halifax spokeswoman says: “We consistently review our product propositions and criteria to make sure they remain appropriate. The retirement home plan is a niche scheme and therefore only represents a very small proportion of our business. This change ensures alignment across the group.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Patrick McCarry 12th August 2011 at 2:18 pm

    may only be small now but very short sighted of Halifax. This is a growing area and the numbers will only increase!!!

  2. How rediculous is that? Whilst other lenders are looking to enter the market, Halifax pulls out. This now leaves only one lender with an interest only facility. Where is the TCF for Halifax existing borrowers on interest only who were looking to switch to the RHP?

  3. I am unsure about whether this is good news or not – how many pensioners want to be paying a mortgage in retirement?

    And when interest rates go up (eventually) – I bet the increase in income of those pensioners will not even come close to covering the higher costs (and can you imagine the headlines, the press would report on ‘Evil Bank demands higher interest rate payment from poor pensioners’)..

    True Equity Release Schemes are generally more expensive though- so it could cost them more in the long run.

    Hopefully, most borrowers will seak advice prior to retirement though, and plans can be made to deal with any debit whch may remain on their retirement (Downsize or save more!).

  4. What a short sighted move!!!!!!!!

    It has Lloyds lack of mortgage understanding splattered all over the decission, coupled with regulatory fear.

    What a shocking move, which will severely restrict the elderly at a time when the general economy is in such a poor state with no sign of improvement.

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