Partnership Home Loans is offering a lifetime mortgage which will be of great help to the elderly who are in ill-health. Those who are overweight, have high blood pressure or smoke with a history of heart problems will be able to borrow a much higher percentage of the value of their house than is normally available.
For example, the average standard market maximum percentage of value of a property which most lenders will allow is 28 per cent of the value for a man aged 70 while the new plan will offer 41 to 50 per cent of the property value if the homeowner has a variety of health problems.
After three years, additional amounts can be advanced if the property value has risen. At present, the interest rate is fixed at 6.99 per cent and rolled up until death. No medical examination is required but a medical assessment form must be completed and a report from the applicant’s doctor is required. Each case is then assessed individually by the specialist underwriters.
Take as an example a husband and wife both aged 80 living in a bungalow worth £350,000, where the husband has high blood pressure, high cholesterol, is overweight and has angina while the wife has diabetes, is overweight, smokes, has high blood pressure and a high cholesterol level. They could borrow £189,000 against a standard market rate of around £141,000 – an increase of 34 per cent.
To take another example, a 75-year-old widow owns a property worth around £400,000. She has diabetes, smokes and is overweight. She could borrow £196,000 against the market average of about £142,000 – 38 per cent more.
I like this plan particularly because it helps the elderly in poor health enjoy the rest of their lives or enables grandparents to give money to their children or grandchildren while they are alive.