Second Home Lifetime Loan and Buy-To-Let Lifetime Loan extend the range of Spry products available to Irish customers
Specialist later life lender Spry Finance, Ireland’s sole provider of Lifetime Mortgages, has announced the launch of two new equity release products for the Irish market.
The Second Home Lifetime Loan and the Buy-To-Let Lifetime Loan are designed to provide increased financial choice for older people. They differ from Spry’s standard Lifetime Mortgage because they are secured against a property other than the borrower’s primary residence.
Both new products have been developed in direct response to customer demand and are part of Spry’s product-led growth strategy to increase the value of the Irish later life lending sector to more than €200m annually within the next three years.
The Second Home Lifetime Loan will enable over-60s to release some of the value in a second property they own in the Republic of Ireland that is not their primary residence. The property must not have a tenant or be rented, although it may be let on a short-term basis for up to a maximum of eight weeks per year.
The Buy-To-Let Lifetime Loan will be available to those aged over 60 to release equity from a property they own that is a residential investment or rental property in the Republic of Ireland. The property must not be lived in by the customer or their family and must have a tenancy in place registered with the Residential Tenancies Board (RTB).
With both new products, a qualifying property must have a minimum value of €300,000 if it is in Dublin, or €225,000 elsewhere. The minimum loan amount, at €50,000, is higher than the Spry standard lifetime mortgage (which is secured on a primary residence) and the interest rate of 6.95% is fixed for the duration of the loan.
As with all Spry products, the loan does not need to be repaid until the borrower dies and every loan carries a No Negative Equity Guarantee, which means the amount to be repaid can never be more than the value of the property. Monthly payments are not required, although borrowers may choose to make optional repayments to manage the balance of the loan over time.
The new products line up alongside the standard Spry and Green Lifetime Mortgages, and the company’s Guaranteed Inheritance Lifetime Mortgage and the green version of the same, meaning that Spry now offers six different types of equity release mortgages and loans.
Figures from the most recent census found there were more than 66,000 holiday homes in Ireland in 2022, while RTB data indicates that as many as 57,000 properties with active tenancies are owned by landlords aged over 65.
John Moriarty, CEO of Spry Finance, said: “A Spry Lifetime Mortgage enables homeowners aged over 60 to release value in their home without relinquishing ownership, selling up or moving out. The Second Home Lifetime Loan and Buy-To-Let Lifetime Loan extend this concept to other property assets. Both products have been developed in response to feedback from our customers.
“Our goal to grow the later life lending sector to more than €200m annually within the next three years will be driven in large part by new products. Spry launched in 2021 with just the standard lifetime mortgage; we now offer six later life lending products and intend to roll out more in the future to increase financial choice for Ireland’s growing older population.
About Spry Finance
Spry Finance, launched in 2021, is the retail arm of Seniors Money, an Irish-owned lifetime loan provider that has been operating successfully in Ireland since 2006 and has more than €480m of assets under management across its lending and servicing platform, and loan portfolios. The company is regulated by the Central Bank of Ireland and is authorised by the CBI as a Retail Credit Firm. It is fully funded by a number of major international financial institutions including Canada Life Reinsurance. Spry Finance is a customer-focused company, providing older people with real options for living a greater life in later life. Keep up to date with Spry Finance news.
About Spry Finance Lifetime Mortgages & Lifetime Loans
A lifetime mortgage allows people to release equity in their home – without having to sell it or move out – by borrowing a lump sum secured on the property. For the standard Lifetime Mortgage, the property must have a value of €225k outside of Dublin or €300k in Dublin, and the amount borrowed is dependent on the age of the borrower; for example, a 60-year-old can borrow 15% of the house value, a 70-year-old can borrow up to 25%, and an 85-year-old could borrow up to 40%.
The borrower continues to own their home and does not have to make regular repayments; however, the interest is added to the loan each month, meaning the loan balance grows over time. As the interest rate is fixed for life at the beginning, there is certainty about what size the outstanding loan balance will be at any time in the future. Borrowers can choose to make monthly or periodic payments (with yearly limits) to manage the loan balance over time.
The Second Home Lifetime Loan and the Buy-To-Let Lifetime Loan differ from a standard Lifetime Mortgage because they are secured against a property other than the borrower’s primary residence. As a result, they do not meet the definition of a Lifetime Mortgage contained in the Consumer Protection Code and borrowers and/or their family members will not have the right to permanently reside in the property. However, the Second Home Lifetime Loan and the Buy-To-Let Lifetime Loan operate in almost the same way as a Lifetime Mortgage. Outside of borrowers not having the right to tenure, customers of the Second Home Lifetime Loan and the Buy-To-Let Lifetime Loan Lifetime Loans will receive all other protections afforded to customers of Spry’s Standard Lifetime Mortgage (e.g. No Negative Equity Guarantee).
