Payment Reward Lifetime Mortgage

The key differences to our Standard Lifetime Mortgage are:

1. You are required to make committed monthly interest payments for an agreed Payment Reward Period, of between 1 and 1o years, during which time you will benefit from a reduced interest rate, Reward Rate 1 (see Table 1).
2. At the end of the agreed Payment Reward Period, customers who have made all agreed payments will be rewarded with a Second Reward Rate for the remainder of the loan. They will no longer need to make monthly interest payments.
3. However, you will retain the option to continue to make optional repayments of up to 10% of the original loan amount per year as per the Standard Lifetime Mortgage product without incurring an Early Repayment Charge (ERC).
4. Similar to our Standard Lifetime Mortgage the Payment Reward Lifetime Mortgage will usually be repaid from your estate, when you move into long term care or on the sale of your property.

Table 1:

Note: To provide cost certainty, all three interest rates are fixed and will be agreed with you before taking out your loan.

Eligibility Criteria

The Payment Reward Lifetime Mortgage is available to residents in the Republic of Ireland aged 55 or over who own a residential second (non-tenanted) private property in the Republic of Ireland.

• If there are two of you, the younger person must be aged 55 or older
• You must own a residential property in the Republic of Ireland
• Your property must be of standard construction and worth at least €300,000 in Dublin or €225,000 outside Dublin.
• You must want to borrow a minimum of €50,000
• You must be able to afford to make interest-only payments for an agreed Payment Reward Period of between 1 and 10 years:
  • • For customers under the age of 60, the minimum Payment Reward Period must take them up to their 60th birthday (i.e. if a customer is 55, the minimum Payment Reward Period will be for 5 years, if a customer is 56 the minimum Payment Reward Period will be for 4 years etc.);
    • For customers between the age of 60 and 79, a minimum Payment Reward Period of 1 year will apply; and
    • For customers over the age of 79, a maximum Payment Reward Period of 1 year will apply.

How much can I borrow?

• The minimum amount that can be borrowed is €50,000 up to a maximum of €350,000.
• The actual maximum loan amount will be determined on a case-by-case basis based on your age, the Payment Reward Period you agree to and the value of the property being put forward for security.
• If there are two of you borrowing together, the amount available will depend on the age of the younger borrower.
• An affordability assessment will be required to ensure that you can meet the payments for the agreed Payment Reward Period.

The Payment Reward Period

• Committed monthly interest payments must be made throughout the agreed Payment Reward Period in order to avail of the initial reduced Reward Rate
• Once all committed payments are made during the Payment Reward Period, the Second Reward Rate will automatically apply at the end of this period
• Missed committed interest payments during the Payment Reward Period, where they
• occur, will be added to your loan balance and will be subject to compound interest (as per the standard application of interest to a Lifetime Mortgage)
• If you miss (and do not make up within 3 months) 3 interest payments during the Payment Reward Period, you will forgo the Reward Rate and revert to the Contracted Rate. Where this occurs, you will not benefit from the Second Reward Rate.
• There is no risk to security of tenure (i.e. no payment arrears or risk of repossession).

To find out more about the Payment Reward Lifetime Mortgage please contact us.

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