New EPPARG member SocioHypotheek launches on Dutch market
New EPPARG member SocioHypotheek B.V. has become the Netherlands’ first fully regulated mortgage lender focusing solely on elderly and lifetime mortgages.
SocioHypotheek B.V. has received its license from the Dutch Financial Authority (AFM) to originate and service mortgages, which makes the company the first financial institution in the Netherlands to clearly put its primary focus on the elderly and lifetime mortgages. It is also the first Dutch mortgage provider to align its interests with EPPARG to create a safe, reliable and fair equity release market in the Netherlands for both borrowers and investors.
The product, the SocioHypotheek, provides an opportunity for senior borrowers of 65+ years to unlock wealth locked in their homes. The SocioHypotheek represents an innovative new offer to Dutch residents as it allows them to make flexible annual payments that are agreed upon with the borrower and his mortgage advisor in advance of contracting the loan.
Frans de Kievit, CEO of SocioHypotheek B.V. explained: “We offer lifetime mortgages with annual payments and a maximum Loan-to-Value (LtV) of 60%. This seems high compared to some other countries but the accruing interest of the first fixed interest period (5, 10 or 15 years) is already a component of the debt structure. As a safety measure, and to create the possibility of a No Negative Equity Guarantee, we’ve fine-tuned our solution to ensure that a borrower cannot reach this (60%) LtV before his or her 80th birthday. This makes the solution appealing for all parties involved”.
The average LtV and Loan-to-Income (LTI) in the Dutch mortgage market are relatively high but the strong payment commitment of Dutch borrowers, combined with the very strong social safety net, historically low percentage of defaulters and robust industry regulations make for a minimal credit risk. The total market for SocioHypotheek is estimated to be over €135 bn. On average, homeowners aged over 55 have over €200.000 of equity locked in their property. According to De Kievit: “combining the current mortgage climate with the expected rise in house prices provides a very positive outlook for the foreseeable future”
Robbert Mulder, Business Development Manager at SocioHypotheek said: “It is a great time to offer institutional investors the possibility of entering the developing Dutch lifetime mortgage market. We are currently pioneering a solution that has the potential to create better lives for thousands of elderly homeowners by potentially unlocking over €100 billion of wealth that is currently ‘stuck’ in housing. Furthermore, I am very pleased to be able to represent SocioHypotheek and the Netherlands as an associate director of EPPARG to help develop a safe and responsible equity release market”.
Steve Kyle, Secretary General of EPPARG, which is the principal trade body representing the interests of home equity release providers in Europe, commented: “EPPARG has members from all across Europe who are engaged in developing a safe Home Equity Release market and we are delighted to welcome Sociohypotheek B.V. as a new and innovative member from the Netherlands.”
“SocioHypotheek B.V. clearly recognises the importance of good consumer safeguards in this new, exciting and growing market, which has huge potential, and is determined to make a positive difference to the lives of elderly homeowners in the Netherlands,” added Mr Kyle.
SocioHypotheek has secured its first round of funding to build its business case and to become the leading portal of releasing Dutch housing equity.
For more information about SocioHypotheek B.V. visit www.sociohypotheek.nl or contact email@example.com SocioHypotheek B.V. is registered at the Dutch Chamber of Commerce under 77687795 and AFM Licensed under 12047556.