Ireland: Leading lifetime loan provider reopens to new applicants

Ireland’s leading, and now only, provider of Lifetime Loans is re-opening to new applicants.

Spry Finance, the new retail division of Seniors Money Mortgages (Ireland) DAC, has announced that it is now open to new clients with immediate effect. With over 15 years’ experience of working with Irish applicants for Lifetime Loans, Spry’s role is to provide information and guidance to those thinking of applying for a Lifetime Loan. The loan itself will then be provided by the lending division, Seniors Money.

Lifetime Loans allow older homeowners (60+ in the case of Spry Finance) to borrow against the value they have built up in their property without the need to sell it, trade down, or make monthly repayments. Instead, interest is added to the loan balance, which grows over time, and the loan is not repayable until after the borrower dies or moves out of the property.

Older homeowners are often ‘asset-rich’ but ‘cash-poor’ and would not have access to a traditional re-mortgage product due to their age. A Lifetime Loan enables them to borrow against the value of their home while still retaining 100% ownership of it and without having to move out of it.

Speaking of the announcement Derek Handley, Director, Spry Finance, “We are delighted to be able to offer Lifetime Loans to the Irish market once again, and to be doing so through our new division, Spry Finance. Based on over 15 years of experience in Ireland and overseas, Spry will take time to get to know people and their individual circumstances and to help them figure out whether or not a Lifetime Loan is a suitable solution for your particular situation. If, after assessment, a Lifetime Loan doesn’t look like a suitable option then we’ll let the applicant know – as we already have done in several instances during our recent pilot scheme.” 

The new Lifetime Loan product is closely based on the version previously offered to the Irish market by Seniors Money. The amount you can borrow depends on your age and the value of your home (for example, a maximum of 25% of the property value at age 70). The big difference with the new product is that the interest rate is now fixed for life. Fixed interest rate lifetime loans give borrowers total certainty on what the future loan balance will be and are the norm in the UK, where over £4 billion worth of these loans are taken out each year.

Spry Finance report that because this credit option hasn’t been available in Ireland for the last number of years, there is a pent-up demand in addition to a growing underlying demand, as the number of over 60s in the population continues to grow.

Mr Handley commented, “For every ten people who were aged 60 or older when we first launched in Ireland back in 2006, there are now fifteen. The family home remains the single biggest asset most of this age group have, and a Lifetime Loan allows them to release some of the value tied up in that home, without having to sell or move out of it. From the volume of unsolicited enquiries that we continue to receive, it’s clear that there is strong demand from a significant number of older homeowners who want to use the equity they have built up in their home to provide themselves with the necessary funds to make their home or other parts of their lives more comfortable in the latter part of their working life and in retirement.”   

The Lifetime Loan Process

Mortgage brokers can refer clients to Spry Finance but cannot directly submit applications. All applicants for a Lifetime Loan must first complete a mandatory consultation process with Spry Finance, to ascertain if a Lifetime Loan is suitable for their needs and to ensure that they have received and understood all the necessary information on how the product works. This is the same process as previously successfully used by Seniors Money and has recently been re-tested in a pilot scheme.

Mr Handley explained, “It is in everyone’s best interests, especially the client’s, that the provision of comprehensive information on Lifetime Loans is handled by a specialist team who focus solely on this product day-in and day-out and have been doing so for years. We are confident that, as the only provider of this finance option for the over 60s in the Irish market, we can address a financial need that certainly exists for many. We’ve just completed a very successful pilot scheme with the hundreds of people who were already on our waiting list, and the first loans have already been drawn down. We’re ready now to open the doors to everyone who is interested.” 

Spry Finance report that, based on the recent pilot scheme, borrowers will continue to use the loan proceeds in similar ways to those previously experienced in Ireland and other countries. The loans are typically used for more than one purpose, but consistently the most common use is to fund works to the home to make it more comfortable and energy efficient. After that, clearing small residual debts to free up monthly cashflow and funding specific care or medical expenses are amongst the variety of other purposes for which the loan proceeds are used. These are generally once-off expenses that may be a challenge to fund solely from a retirees’ existing pension income.

Of the new brand, the company said that Spry Finance has been created as a new, more relevant, consumer-facing brand for a new generation of Lifetime Loan customer and to create a clear distinction between the role of providing information, support and guidance to those who are making the decision about applying for a Lifetime Loan, and the role of being the lender of the Lifetime Loan itself.

About Spry Finance

Spry Finance is a trading name and retail division of Seniors Money Mortgages (Ireland) DAC. Its role is to guide people through understanding and applying for a Lifetime Loan.

Through a consultation process that is mandatory for all applicants, Spry Finance provides comprehensive information about the Lifetime Loan option and advises applicants on the suitability or otherwise of a Lifetime Loan to meet their particular financial needs and circumstances. The loan itself is still provided by Seniors Money, the lending division of Seniors Money Mortgages (Ireland) DAC which has been the leading Lifetime Loan lender in Ireland for over 15 years. Seniors Money Mortgages (Ireland) DAC, trading as Spry Finance and Seniors Money, is regulated by the Central Bank of Ireland.

According to CSO census data and population projections, there were c.650,000 people aged 60 or older in Ireland in 2006 and today this stands at c.1 million.