Early Repayment Charge

Because this is a fixed rate product, if you make any loan repayments before you are required to, this will lead to unexpected costs for the lender (Seniors Money).

An Early Repayment Charge (ERC) will only then arise if you repay some or all of the loan within 10 years of taking it out. Even then an ERC will only arise if interest rates are lower than when the loan was taken out and if you are not eligible for one of the exemptions described below.

In such circumstances, an ERC may arise if you:

  1. repay more than 10% of the original loan balance in any one year within 10 years of taking it out  or,
  2. voluntarily repay the full loan balance within 10 years of taking it out

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Time limit to ERC

The ERC only applies to repayments made during the first 10 years*.

  • Any repayments made after 10 years are exempt from an ERC
  • For repayments made within 10 years, the ERC only applies to the remaining period to 10 Years

Example: A loan repaid 6 years after taken out will incur 4 years of ERC

*If you are aged 78 or older when the loan commences, no ERC will arise after your 88th birthday. For example, if you are aged 80 when the loan is taken out and repay it 3 years later, the ERC would only apply to the remaining 5 years to your 88th birthday.

No ERC if interest rates are higher

No ERC will arise if interest rates when the repayment is made are higher than when the loan was taken out. This is determined by comparing:

– A The 10 year Irish Government Bond rate at the time you took out the Lifetime Mortgage, with
– B The 5 year Irish Government Bond at the date you are making the full repayment (or the nearest comparable rate most favourable to you)

If B is higher than A no ERC is payable.

ERC Exemptions

No ERC will arise when a loan is repaid in full or in part due to one of the following events:
• Death of last Nominated Resident
• Move to permanent long-term care of last Nominated Resident
• Full repayment within 3 years of death or move to permanent long-term care of the first Nominated Resident
• Sale of the property
• Repayment following demand by us in certain circumstances
• After 10 years of taking out your Lifetime Mortgage
• After your 88th birthday e.g. If you are aged 80 when the loan is taken out and you repay it 3 years later, the ERC would only apply to the remaining 5 years to your 88th birthday
• For repayments made within 10 years, the ERC only applies to the remaining period to 10 years e.g. a loan repaid 7 years after taken out will incur 3 years of ERC

Optional Repayments

How the ERC is calculated

No ERC will be charged if interest rates are higher than or equal to when the loan was taken out. This is determined by comparing:

  1. The 10-year Irish Government Bond rate at the time you took out the Lifetime Mortgage, with
  2. The Irish Government Bond rate for remaining period in respect of which the ERC is payable at the date you are making the repayment (or the nearest comparable rate most favourable to you)