Interest Only Loan (APR 5.1%)
Interest is paid every month, but the loan capital is repaid when the property is sold.
What is the Interest Only Loan?
With an Interest Only Loan, your monthly repayment repays the monthly interest accrued, but not the capital. This means your settlement figure will always remain the same no matter when the loan is repaid. For example, should you borrow £5,000, you will pay interest each month of £20.83 and the settlement figure will remain at £5,000 until it is repaid. The loan will be repaid out of the proceeds of your house when it is sold.
Can I settle early or make overpayments?
If you wish to make overpayments, or pay the balance in full, you can do so at any time with no charges being incurred.
Who is this loan available to?
The Interest Only Loan is available to homeowners aged 60 and above. The eligibility criteria relating to appropriate work can vary, so please contact South Coast Moneyline for more information. The Interest Only Loan suits those who can only afford small monthly repayments.
How much can I borrow?
Loan amounts from £1,000 to £25,000 are available. The amount lent will be dependent on the extent and cost of the works to be done.
Is security required?
Yes. The loan will be secured using an equitable mortgage. Similar to most other mortgages on the market, this means that the property cannot be sold, or the ownership changed without the Home Trust Loan being repaid.
What will my monthly repayments be and how much interest will I pay?
Your monthly repayments will depend on how much you borrow, and the interest payable will depend on how long you take to pay the money back. However, unlike secured loans from most other lenders, the interest rate will remain at 5.0% (5.1% APR) throughout the entire term of your loan. This means that monthly repayments will also remain the same, making budgeting easy. The table below illustrates the level of monthly repayments on a variety of borrowing scenarios:
|
Loan Amount |
Term |
Monthly
Repayment* |
Settlement
Figure after: |
|
£3,000 |
|
£12.50 |
5 yrs |
£3,000 |
|
Life |
10 yrs |
£3,000 |
|
|
15 yrs |
£3,000 |
|
|
|
|
|
|
|
£5,000
|
|
£20.83 |
5 yrs |
£5,000 |
|
Life |
10 yrs |
£5,000 |
|
|
15 yrs |
£5,000 |
|
|
|
|
|
|
|
£15,000 |
|
£62.50 |
5 yrs |
£15,000 |
|
Life |
10 yrs |
£15,000 |
|
|
15 yrs |
£15,000 |
* YOUR HOME MAY BE REPOSSESED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
If you miss monthly repayments, the total amount payable will be higher than agreed and the settlement figure may be more than the original loan amount. However, should you run into any financial difficulty, where possible we will try to find ways of resolving the situation before considering any formal action.
Are there any other costs involved?
We do not charge any legal or administration fees to arrange your loan. However, we will need to collect an HM Land Registry fee which enables us to register the charge to secure the loan against your property. The standard fee is £50, although your Home Trust Loan Officer will confirm the amount before you enter an agreement. When the Loan Agreement has been signed, the HM Land Registry fee will be collected and is thereafter non-refundable. Until you sign your Loan Agreement however, there are absolutely no costs and therefore you can be assured that there is no obligation to take out a loan.