The Home Equity Release Mortgage (HERM) is available to homeowners over the age of 60 years and, depending upon their age, allows customers to retain ownership of their home whilst releasing up to 50% of the capital in their property.
There are two versions of the home equity release mortgage (HERM): the standard HERM gives a cash lump sum, which can be used to fund essential home or lifestyle improvements, while the cash plus HERM combines an optional cash sum and a guaranteed fixed monthly cash release. There are no
monthly payments to make on the loan, as the interest is "rolled up" and the total debt repaid when the customer dies or moves into sheltered accommodation or long-term care or the property is sold. For both the standard and cash plus HERM, the borrower has the option of two interest rates, either Fixed or Capped.
Figures from the Council of Mortgage Lenders establish that equity release continues to be viewed as a growth market. The CML estimates that 11,700 new equity release mortgages - worth a total of £498m - were taken out during the first half of 2003, representing an increase of 121% on the same period last year. Industry estimates value the market at a potential
£100bn.
Andy Ferns, Sales Director of ZAN, said:
"Equity release is one of the fastest growing sectors in the UK mortgage market as more people realise that they can unlock capital from their home in order to improve their lifestyle in later years. By giving our customers access to a highly competitive equity release product from one of the country's acknowledged experts in this field, we are fulfilling our commitment to provide customers with the widest choice of market leading products.
The combination of a Northern Rock Home Equity Release Mortgage with face-to-face advice from the Zurich Advice Network is a compelling proposition. It offers freedom, flexibility and security for those looking to make the most of the value of their home."
