I have been recommending Standard Life lifetime mortgages for years. But are their plans any good, and how do they compare to the competition?
Standard Life offers the most popular type of equity release, a lifetime mortgage. All Standard Life lifetime mortgages meet the Equity Release Council standards and afford you their protections. Their Horizon plans offer unique features, including downsizing protection from day one.
Let's review:
What interest rates does Standard Life offer? And how do they stack up against the competition?
* Some other lenders offer variable live pricing. Please request your personalised illustration for your best rate.
Standard Life also offers discounts up to 0.75% on the interest rate on certain plans if you agree to make monthly interest payments.
How much money can Standard Life provide on their lifetime mortgages? Use our calculator to find out, plus see how they stack up to the wider market.
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Standard Life joined the equity release market with branded products in 2021; however, their owner, Phoenix Group, has been lending in the equity release market for many years prior.
Standard Life offers the most popular type of equity release plan, the lifetime mortgage. Let's explore some criteria and features in greater detail:
Horizon
lifetime mortgage |
| Fixed-for-life interest rates from 5.64% MER |
| Discounts to the interest rate on selected plans if you agree to service part/all of the interest |
| Can apply if aged 55-84 |
| Minimum property value £99,000 |
| Minimum loan £10,000 |
| Add a cash reserve to access money later |
| Optional payments of up to 10% each year |
| Downsizing protection |
| Significant life event waiver |
| Fixed early repayment charges |
| Free valuation on initial advance |
Free valuations: All Standard Life equity release plans offer free valuations on initial borrowing, regardless of the property's value.
I love this feature because it takes all the risk away from you. If there are any unforeseen issues with the survey, you will not have to pay anything upfront, and you will not be liable for paying a penny should you decide not to proceed.
Arrangement fees: To obtain the best interest rates, Horizon lifetime mortgages require an arrangement fee of £995. However, a fee-free option is available for a slight increase in the interest rate.
Big brand: Standard Life is a household name with a strong reputation and a long trading history.
This can provide you with great peace of mind when taking a plan that could last the rest of your life!
Useful features offered by Standard Life
Significant life event waiver: For joint applications with Horizon lifetime mortgages, if you repay the lifetime mortgage following the first borrower passing away or moving into long-term care, an Early Repayment Charge (ERC) is not applied.
Downsizing protection: With Horizon lifetime mortgages, if you move to a new property which Standard Life will not lend on and cannot port your lifetime mortgage, an Early Repayment Charge (ERC) is not applied.
This waiver includes moving abroad, into an age-restricted property or a home built of non-standard construction.
Standard Life is unique in offering downsizing protection from day one of having your lifetime mortgage. I often recommend Standard Life plans when clients are planning to move in the coming years to help negate the risk of incurring a penalty.
Partial repayments: You can repay up to 10% of the loan amount each year without penalty. There is a minimum payment amount of £50. Your annual allowance is renewed on the anniversary of the date the borrowing completes. Any unused balance does not roll over into the following year.
Short ERCs: Standard Life only levy an Early Repayment Charge for the first eight years: – 8% in year 1, 7% in year 2, 6% in year 3, 5% in year 4, 4% in year 5, 3% in year 6, 2% in year 7, 1% in year 8 and 0% from year 9 onwards.
Interest Reward: Receive a discount of up to 0.75% on the interest rate if you agree to service the interest on selected Horizon lifetime mortgages.
There are no affordability assessments and you can choose to stop servicing the interest at any time. If you stop before the agreed interest serviced period, you will lose the discount to future interest charges. However, if you complete your agreed term (5/10/15 years) you will keep the reduction to the interest rate even if you stop making payments.
Horizon Interest Reward lifetime mortgages are great! As you service the interest, plus can make an additional 10% overpayments, it is possible to repay the loan in full in less than eight years without penalty.
Horizon Interest Rewards can be a great option if you are considering a secured loan or want the flexibility of having no affordability assessments and no risk of losing your home if you stop paying.
Standard Life's equity release underwriting
Standard Life lends on most standard-built properties. However, there are some parts of their underwriting which are particularly strong compared to most equity release lenders:
Poor credit: Standard Life does not assess any CCJs, defaults, arrears or missed credit payments with an application. You can choose to repay any outstanding CCJs, arrears and missed credit payments, but you are not obliged to. However, you cannot apply if you are currently subject to an IVA.
High flood risk: Standard Life accepts properties in high flood-risk areas, provided that the property has not flooded due to environmental causes in the past 15 years.
Standard Life does not consider your medical history. Other lenders will consider certain medical conditions and offer more money or discounts to their standard interest rates for medically enhanced plans.
Standard Life is also not as flexible as other lenders for properties that are non-standard construction, near commercial activity, or where you run a business from home.
As part of our equity release advice service, we will consider plans from Standard Life and compare them to those of other equity release lenders.
Please speak with one of our equity release advisors for your personalised illustration.
Standard Life is one of the most popular equity release lenders. Benefits of their plans include:
- Downsizing protection
- Reserve facilities, and
- discounts on certain plans while servicing the interest.
However, you may be able to achieve larger loans and lower interest rates from other equity release lenders. Furthermore, Standard Life does not offer medically underwritten lifetime mortgages.
When you are ready, you can book an appointment with one of our equity release advisors, who can show you how Standard Life compares to other lenders for your specific needs.
If you have an existing equity release plan with Standard Life, we can help you assess the best way to borrow additional funds.
Where you have a reserve facility in place (from a drawdown plan), you can contact Standard Life directly on 0800 068 0212 to request additional funds.
However, I always suggest that you compare additional borrowing with Standard Life to the cost of moving to a different lender.
We will require your authority to discuss your existing plan with Standard Life. Please complete the form below so that we can send you a Letter of Authority to complete, sign, and return so that we may speak with Standard Life.
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What a typical client looks like
As covered above, Standard Life's equity release plans fit the masses. However, there are certain types of clients who, from my experience, I am more likely to recommend a Standard Life equity release plan. Let's run through some examples of prime Standard Life clients:
Example 1
John and Jane are both 71 years old. They live in their family home, which they have owned for the last 40 years.
However, they live in London near the River Thames, which puts them in flood Zone 3, which has excluded them from other equity release lenders in the past.
With a lifetime mortgage from Standard Life, they can apply for a lifetime mortgage as their home has not flooded for more than 15 years.
Example 2
John and Jane are 75 and 61 years old respectively. Their daughter lives at home with them but plans to leave for university in two years.
They would like to stay in their home until their daughter goes to university, at which point they plan to move to Spain.
With the rising cost of living, they need to raise enough money to maintain their standard of living, support their daughter and pay for a couple of trips to Spain to find their new home.
John and Jane are recommended a Standard Life equity release plan, which includes downsizing protection. This plan allows them to repay the mortgage without penalty if they more to a new property that Standard Life will not lend on, including moving abroad.
Example 3
Jane is 61 and lives in a bungalow she purchased following her husband's passing last year.
She feels her home meets her needs for the rest of her life; however, she wants to retire early but is only entitled to her pension once she turns 67.
Unfortunately, when her husband passed, she ran into financial difficulty and has £5,000 owing in County Court Judgements.
With a lifetime mortgage from Standard Life, Jane can continue to live in her home while having access to a drawdown lifetime mortgage that will provide her with enough money to support her needs.
Standard Life will not refuse her equity release due to her CCJs, and she plans to repay the debts once she receives the money from the equity release.
Why don't I go to Standard Life directly?
Of course, you can go to Standard Life directly to request their lifetime mortgages. However, you still require financial advice before taking one of their plans, and they do not currently have any directly employed advisors. Instead, Standard Life will put you in touch with a financial advisor who will only advise you on Standard Life's equity release plans.
If you choose to work with an advisor who works with other lenders, you could access a more suitable lifetime mortgage from another provider.
But won't I get a better deal by going direct?
The interest rates charged and the amounts of money you can release will be the same whether you go direct or through another advice firm.
Why not book your free equity release consultation with one of our equity release advisors to explore your options?
In closing
I hope I have helped you understand Standard Life's equity release product offering and that you now know whether you could be a Standard Life equity release client. If you have further questions about Standard Life's equity release plans or would like to see if Standard Life is the plan I recommend for you, contact us at 0207 158 0881.
Remember, we also compare plans from other equity release lenders, so we can save you time shopping around and find the most suitable plans. You can also use our equity release calculator to compare the lowest-rate plans.
If you have further questions, why not speak with one of our qualified advisors?
Call us on 0207 158 0881 or use our online form to book your FREE consultation.
While a qualified equity release advisor has written this guide, it is not intended to be used as financial nor legal advice and should not be relied upon.
To understand the full features and risks of an Equity Release plan, ask for a personalised illustration.
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