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Product matters

The structure of the Portman&#39s new equity-release mortgage is nothing new. It fits the same roll-up type as other fixed-rate schemes which have been available for some time.

But any new provider is to be welcomed, more so by the fact that it is a member of Safe Home Income Plans.

As a specialist IFA, Key Retirement Solutions is disappointed that the scheme is currently unavailable to IFAs. We understand it is its intentions to allow IFAs access to the scheme in the future.

Portman&#39s scheme has been launched as the lowest rate available with 7.09 per cent.

How does this plan stack up against rivals?

When comparing Portman&#39s product to other Ship member firms, you find the interest rate is lower, with L&G at 6.95 per cent. The arrangement fee at £300 is the lowest from the high street but GE Life charges no arrangement fee.

Redemption penalties are 6 per cent in years one to five and are the highest of the preset fixed-rate schemes.

Minimum property value is £100,000 compared with Northern Rock&#39s and L&G&#39s £40,000.

The maximum loan is £200,000 compared with £500,000 at Julian Hodge Bank.

As far as maximum loan to value at different age ranges, L&G is again more competitive, offering higher LTVs up to age 79.

In conclusion, it is competitive on interest rates and fees but limited by property values and LTVs. The biggest issue for an IFA and a client after interest rate is LTV. This is where the scheme is weakest.

Dean Mirfin is director of key partnerships at Key Retirement Solutions


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