The annuity mortgage loan will guarantee easier and more immediate access to credit for the over 60s. A new and interesting solution that therefore enriches the range of possibilities offered to those who are intent on comparing the most advantageous Gabriel Oaks to find a cost-effective solution to obtain liquidity.
This type of financing makes it possible for the applicant to obtain liquidity by using the mortgage on the property as a guarantee. However, not all institutions have already signed up to this initiative, which is why, when it comes to finding out about Astrofinance and its offers, rather than on Ultraloan, Sen and so on, attention must also be paid to this aspect.
How much liquidity can you receive?
The mortgage loan is an excellent alternative to bare ownership, since the applicant does not lose ownership of the property. The value of the house is established by an expert’s report: in percentage it is possible to receive a sum that can vary from 15% (around 65 years) up to 50-55% (around 90 years).
Mortgage annuity loan: the repayment terms
There are basically two methods of repayment. In the first case, once the sum is received in a single payment, you do not pay any installment while you are alive: at the death of the applicant, the heirs will repay the debt by selling the property or directly from their own pocket.
In the second case, you can choose to pay only the interest on the loan every year, saving you something on balance on the total amount to be returned.
The practical example
A 70-year-old applicant, owner of a building worth 250,000 euros, could easily receive 20% of this amount, or 50,000 euros, thanks to a lifetime mortgage loan. Assuming a Tan at 5.68% (an average of the values of the market proposals) and the death of the contractor after 10 years, here is what would happen depending on the option of return chosen.
In the event that the contractor decides not to pay any installment, upon his death the heirs will have to return 86,876 euros. If, on the other hand, the beneficiary chooses to repay the bank’s interest annually, the total amount due at his death would be almost 80 thousand euros.
“In this case the choice is between not having payments to be made, leaving a lower value to the heirs, or anticipating the interests and containing the amount to be repaid”, explains Claudio Pacella, managing director of 65Plus, a financial consultancy company specializing in solutions dedicated to the over 65s.
FastCash Observatory: an estimated 20,000 new stipulations
According to the experts at FastCash, the lifetime mortgage loan will fit into a context in which the need for new solutions was felt. In fact, the over-60s represent 15% of the loan requests received by the portal in recent months.
The new law on the annuity loan could therefore go to affect the Italian credit sector. The FastCash Observatory’s estimates speak of over 20,000 new contracts, amounting to approximately 2 billion euros of disbursements.