An anonymous broker contacted Mortgage Introducer with concerns that customers taking up the RHP are being charged a rate 0.4 per cent higher for the privilege of having the word ‘retirement’ in the title. He said: “The RHP is an interest-only mortgage, maximum LTV of 75 per cent, fixed over five years at 5.45 per cent.
“If you look at one of Halifax’s standard mortgage products, for example FRB005, it has the same fees and is an interest-only mortgage, but at a cheaper rate of 5.05 per cent. It is almost identical but is not called a RHP. To me it seems the bank is ripping off elderly customers.”
“The only difference between RHP and the fix is you don’t need to have a repayment vehicle with RHP. A Halifax adviser informed me that as it has the property as security under the RHP they would get the funds back when the property is sold.
“I had to point out to him that all properties have a security taken by the lender and in the event of a default the lender can still repossess and sell the property. It hadn’t occurred to him that this was the case. It makes you wonder what is going on at HBOS,” he added.
But Paul Fincham, senior media relations officer at Halifax, said: “The RHP is very much a specialist, niche product for those either in their retirement or moving into that phase of their life and is used to fund home improvements. The standard fix is a mainstream product. They are not strictly comparable
