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Exclusive: Octopus Group soft launches equity release lender

  • 12/01/2018
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Exclusive: Octopus Group soft launches equity release lender
Octopus Group, parent company of specialist lender Octopus Property, has entered the equity release market with three lifetime lending products in an early stage pilot.

Mortgage Solutions understands the lender is looking to extend discussions with two trusted distribution partners out to the wider market.

The Octopus Lifestyles brand offers one product for standard residential equity release customers and two for clients with additional properties, such as landlords and holiday homes.

According to the lender’s website, its Family Wealth Plan is designed to help older homeowners fund later life needs in a tax-efficient way.

It uses a combination of a lifetime mortgage and an estate transfer trust – although these can be taken out individually.

The product has a £1,500 fee, includes interest roll-up, but has a no negative equity guarantee and will require a valuation.

For the trust there may be additional charges on the underlying investments.

Borrowers can repay up to 10% of the outstanding balance each year, with no charge, however early repayment charges (ERCs) of 5% for the first five years and 3% for the next five will apply.

The lender will also aim to medically underwrite Family Wealth Plan applicants.

The minimum initial loan is £100,000 and is restricted to properties worth more than £400,000.

Maximum loan to values (LTV) are available up to 25% for clients up to 70 years old, and increase to a maximum 45% for those aged 90 or over.



Landlords and holiday homes

For older borrowers looking to use the value of additional properties there is a product for those with a second home and one for buy-to-let landlords.

Both products are available for those aged 70 or older with a minimum property value of £250,000 and product fee of £2,000.

The minimum loan value is £75,000, with up to 20% LTV available for 70-year olds, increasing to 40% LTV for those aged 90 or older.

With the buy-to-let product, for two or more properties Octopus will lend sums of £50,000 upwards per property, with a further £1,000 product fee per additional property.


Octopus Group

The diverse group includes an investment arm, Octopus Investments, Octopus healthcare, investors in UK healthcare infrastructure, Octopus Ventures, a venture capitalist company, as well as a property arm and a fintech digital startup laboratory, Octopus Labs.


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