Norwich Union is replacing its equity release scheme, Capital Access, with Flexible Cash Release, a ...
Norwich Union is replacing its equity release scheme, Capital Access, with Flexible Cash Release, a plan allowing homeowners to access up to 45% of the capital locked up in their property.
The former plan, which enabled elderly homeowners to access a set 30% of their property value, has been scrapped in favour of Flexible Cash Release after feedback from IFAs revealed demand for increased flexibility. Andrew Stronach, spokesman for Norwich Union said: "While Capital Access was popular, IFAs felt that some clients wanted to raise more than 30%, while others wanted to raise less. There was a need for something more flexible."
Interest on the Flexible Cash Release Plan is fixed at 7.85% compound on the value of the loan. On Capital Access the interest rate was fixed at 2.9% of the property value, allowing capital appreciation on the property to offset the cost of the loan.
Under the new plan there will also be the previously unavailable facility to arrange a further loan and borrowers will be safeguarded from negative equity. Commission rates have also been altered from a flat fee of £200 to a flat fee of £150 plus 0.5% of the loan value.
Darren Carter, marketing manager at Norwich Union said that once released there are no constraints on how the capital is used.
"Many IFAs will have clients who could make use of the Flexible Cash Release Plan for a range of purposes, including funding other investments and inheritance tax planning, as the plan can be used to reduce the value of the client's estate."
