Hodge Equity Release & Lifetime Mortgage Review in 2024

Are You Looking to Unlock Funds With Hodge’s Equity Release Alternatives? Learn About the Pros, Cons, Fees and Interest Rates. Read On to Find Out All About Hodge’s History, Customer Reviews and Regulatory Details.
  • Last Updated: 02 Feb 2024
  • Fact Checked
  • Our team recently fact checked this article for accuracy. However, things do change, so please do your own research.

Contributors:

Francis Hui

Key Takeaways

  • Hodge equity release is a mortgage product that allows homeowners aged 65 and above to unlock funds tied in their property without needing to make regular repayments.
  • The interest rates typically vary, but are generally competitive, offering fixed and variable rate options for consumers.
  • It is considered safe as it is regulated by the Financial Conduct Authority and is a member of the equity release Council, which ensures high standards of conduct and protection for homeowners over 65.
  • You can avail Hodge equity release if you have an existing mortgage, as it can be used to pay off your current debt, subject to lending criteria.
  • The pros include competitive interest rates and flexible repayment options, while the cons might involve reducing your estate value and affecting your eligibility for means-tested benefits.

If you have retirement planning on your mind, you may have come across Hodge equity release, the bank that introduced this later-life option to the UK market.1 

Or, if your are seeking an institution that goes beyond financial products, you may have noticed that Hodge Bank has recently joined forces with net-zero company Sero to provide guidance to construction firms on building environmentally friendly homes.2

In This Article, You Will Discover:

    At Every Investor, our team of research and writing experts assists you with retirement planning by providing helpful, independent reviews of financial institutions like Hodge Bank.

    Our process involves a detailed review of providers’ products and services and the benefits and risks associated with using them. Then, we subject the findings to rigorous compliance checks so that readers can access valuable, current information, and find the best company for equity release for their circumstances.

    How Hodge may serve you as you consider your approach to financial planning on the journey to retirement:

    NOTEEvery Investor is an impartial and unconnected third-party information provider via this website, and the details replicated in this commentary represent the opinions of Every Investor only and may not reflect the views or opinions of Hodge. This article must not be interpreted as advice, nor is it a solicitation to conduct transactions in any financial product provided by Hodge.

    Who Is Hodge?

    Hodge Bank is a financial institution focused on serving only a few niche markets.

    It was founded in 1987 and is headquartered in Cardiff, Wales. 

    Although it was a founding member of Safe Home Income Plans (SHIP)3 (the predecessor to the Equity Release Council), Hodge ceased offering equity release products when it sold it's subsidiary Hodge Life Assurance Company to the Reinsurance Group of America in 2021.4

    What Is Meant By 'Equity Release'?

    Equity release is a financial option for homeowners over 55, allowing them to access their home's equity as cash.

    It offers a way to utilize your property's value without selling.

    In equity release, repayment is unique; it's deferred until the home is sold, typically after the owner's death or move into care. This feature differentiates it from traditional loans.

    Read More: Equity Release Guidance

    Why Choose Hodge?

    You may choose Hodge for its curated range of retirement-focused products. 

    One notable specialty of the bank is mortgages designed for the over-50s, enabling individuals to leverage their home equity beyond retirement age. 

    These mortgages include an Early Repayment Promise, which means there are no penalties if you opt to sell your home and repay the mortgage in full.5

    Despite having a smaller customer base of approximately 85,000 clients6, owing to it's niche market focus, Hodge leverages it's extensive experience of over sixty years in the mortgage industry, and a diverse selection of options, to attract new clients.7

    What Does Hodge Offer?

    Hodge offers a range of financial services including savings, mortgages, and commercial lending. 

    In terms of savings, you can choose between fixed-rate bonds or individual savings accounts (ISAs).8 

    On to mortgages, Hodge provides various options such as a 50+ Residential Mortgage, a Retirement Interest-Only (RIO) mortgage (RIO), a holiday let mortgage, and a professional mortgage designed for newly qualified or established professionals.9 

    However, it is important to note that these mortgages are not directly available to the public and can only be accessed through an independent financial advisor. 

    Lastly, in the realm of commercial lending, Hodge offers six different loan types to cater to the needs of professional property developers and investors.10

    Does Hodge Offer Equity Release or Lifetime Mortgages?

    No, Hodge does not offer equity release, as it sold that division of its business in 2021.11

    However, after the sale was announced, Hodge confirmed it's commitment to offering later-life lending and indicated that it intended to re-enter the equity release market by working with third-party funders.12

    Does Hodge Offer an Equity Release Calculator?

    No, Hodge does not offer an equity release calculator since it does not currently offer equity release.

    However, Every Investor offers an obligation-free equity release calculator that you could use to obtain an estimate of how much you may be able to borrow against your home.

    Does Hodge Offer Alternatives to Equity Release?

    Yes, Hodge offers alternatives to an equity release loan in the form of two mortgage products.

    These are the 50+ Residential Mortgage and the Retirement Interest-Only (RIO) mortgage.

    Features of Hodge’s Alternatives

    A more detailed look at the features of Hodge’s alternatives to equity release:

    The 50+ Residential Mortgage

    The 50+ Residential Mortgage was created for older homeowners who wish to switch mortgages or keep their monthly repayments low.13 

    Features of this mortgage include:

    • The interest rate on this mortgage can be fixed for two or five years.14
    • Customers can opt for monthly mortgage and interest repayments (as with a normal mortgage), or they can choose to repay only the interest every month while repaying the principal amount at the end of the loan term.15 Failure to make these monthly payments could potentially lead to the loss of your home.
    • You could borrow up to 75% if you opt for the interest-only option or up to 85% if you choose the repayment option.16
    • If you decide to sell your property, you may be able to port the mortgage to your new home.17
    • If you need to sell your home and decide to repay your mortgage in full, you will not be charged any penalties under the Hodge Early Repayment Promise.18
    • When applying for this mortgage, Hodge will assess affordability by considering employment or self-employment income, pensions, investment income, and rental income.19

    The Retirement Interest-Only Mortgage

    The Retirement Interest-Only Mortgage is suitable for retired homeowners who can maintain monthly interest payments and would prefer a lifelong mortgage.20 

    Features of this mortgage include:

    • The interest rate on this mortgage can be fixed for two or five years.21
    • Customers repay the interest on the mortgage monthly while the principal’s only repaid at the end of the loan term.22 Failure to make these monthly payments could potentially lead to the loss of your home.
    • The loan term is not fixed and will end only once the borrower passes away or moves into long-term care.23
    • Customers can borrow up to 75% of the value of their homes.24
    • If you decide to sell your property, you may be able to port the mortgage to your new home.
    • If you need to sell your home and decide to repay your mortgage in full, you will not be charged any penalties under the Hodge Early Repayment Promise.25
    • When considering applications for this mortgage, Hodge will determine affordability by taking into account pensions, investment, and rental income, commercial rental income, Ltd company residential rental income, holiday rental income, spousal income, subcontractor income, and certain state benefits.26

    Unlike traditional equity release products such as lifetime mortgages, these two products may result in the loss of your home if you cannot make monthly repayments.

    What Are the Costs Associated With Using Hodge?

    The costs associated with using Hodge include interest and fees. 

    If you have a running equity release plan or want to know about the costs related to the equity release alternatives Hodge currently offers, here is more information:

    Interest

    Interest is an important factor to consider when choosing a mortgage product.

    Here are a few insights regarding Hodge’s rates on equity release plans and later-life mortgages.

    Equity Release Plans

    Customers who took out equity release through Hodge before that part of the business was sold in 2021, and who want to borrow additional funds on their loan, will be charged between 5.20% to 6.30% (AER)* for the period during which the rate is fixed, depending on the product.27

    *Accurate as of 01/07/2023. While we check our information regularly, these rates may have changed since our last update.

    50+ Residential Mortgage 

    Clients taking out one of Hodge’s 50+ Residential Mortgages can expect to be charged interest at 5.20% to 6.30% (AER) on a two-year fixed and 5.20% to 6.30% on a five-year fixed.28 

    *Accurate as of 01/07/2023. While we check our information regularly, these rates may have changed since our last update.

    RIO Mortgage

    Borrowers considering a RIO Mortgage from Hodge may be charged interest at rates between 5.20% to 6.30% (AER) on a two-year fixed and rates between 5.20% to 6.30% on a five-year fixed.29 

    *Accurate as of 01/07/2023. While we check our information regularly, these rates may have changed since our last update.

    Interest on 50+ and RIO mortgages is charged at Hodge’s Standard Variable Rate once the fixed-rate period expires.

    Fees

    If you are an existing holder of an equity release plan provided by Hodge, it is important to keep product fees in mind. 

    When it comes to Hodge’s Early Repayment Charges (ERCs), a percentage of the loan amount (between 1% and 5%) is charged, depending on the age of the loan and the terms of the plan.30 

    Other fees charged by Hodge include:

    • Funds transfer fee: This applies when your loan funds are transferred to either you or your solicitor and are charged at £30.
    • Legal fee: This fee is charged by the solicitor you use and should be confirmed with them.
    • Product fee: For 50+/RIO mortgages, the product fee is £995, but may not apply in some cases.
    • Valuation fee: For properties up to and including £1mln, valuations are free, while the valuation fee for home values exceeding this amount will depend on the surveyor and should be confirmed with them.

    Customers can view the standard tariff of mortgage charges e.g., funds transfer fees, legal fees, product fees, and more here

    What Are the Advantages and Disadvantages of Using Hodge?

    The advantages and disadvantages of using Hodge are important to consider if you are considering whether to apply for one of the bank’s equity release alternatives. 

    Advantages

    The advantages of a provider’s products are one aspect to keep in mind when planning your retirement. 

    Basic advantages of Hodge’s equity release alternatives are:

    • Hodge offers retirement mortgages that allow you to loan money beyond retirement age. This frees you from the limitations imposed by other providers who often require you to repay your mortgage in full by the time you retire.
    • You could select a product that allows you to keep your mortgage for the rest of your life should you want or need to.
    • Hodge’s Early Repayment Promise means you will not be penalised if your circumstances change and you must sell your home and repay your mortgage.31

    The potential disadvantages of these products:

    Disadvantages

    Disadvantages and risks are very important factors to consider when weighing up your mortgage options. 

    Some of the risks and drawbacks associated with Hodge’s equity release alternatives include:

    • Unlike with equity release products, Hodge’s retirement mortgages require you to make payments on your loan every month or run the risk of losing your home.
    • Before granting you a retirement mortgage, Hodge will assess whether you can afford it by taking a look at your sources of income before and during retirement.
    • Hodge’s retirement mortgages only offer fixed interest rates for a limited period. After that, you will be paying interest based on the bank’s Standard Variable Rate (SVR) which is adjusted from time to time to reflect changes in costs affecting the lender.

    Important:

    The information presented here should not be taken as financial advice. Please consult a financial advisor before making any major financial decisions.

    How Did We Review the Information on Hodge?

    We reviewed the information on Hodge based mainly on the facts available on Hodge’s website, other reputable sources, news outlets, and industry regulating bodies.

    Once this guide was put together, we performed strict compliance checks to ensure the quality of this article.

    What Are Customers Saying About Hodge?

    What customers are saying about Hodge is similar to what customers are saying about similar businesses; there will always be some customers who express dissatisfaction as well as those who provide more positive reviews.

    Reviews 

    The popular review platform Trustpilot shows that customers are extremely impressed with Hodge’s products and services, giving the bank a star rating of 4.7 out of 5.

    Positive feedback includes elements like professional and friendly customer service, excellent interest rates, and proactive assistance from the bank concerning product maturation and changes.

    Complaints

    Customers who experienced frustrations with Hodge mentioned issues such as unsafe data practices (e.g., receiving unencrypted emails) and struggling to transfer ISAs to another provider.32

    What Are Hodge’s Regulatory Details?

    Hodge’s regulatory details:

    Trading Names

    Hodge currently has four different trading names.33

    These are:

    • Hodge Bank
    • Hodge
    • Hodge Lifetime
    • Julian Hodge Bank Limited

    FCA Permitted Services

    To view the list of permitted services Hodge offers, see here.

    Regulators

    Hodge is authorised and regulated in the UK by the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority.

    Registration Numbers

    Hodge’s FCA registration number is 204439.

    FCA and Companies House Links

    To view Hodge’s FCA details, see here.

    To view Hodge’s Companies House details, see here.

    How Can I Contact Hodge?

    How you can contact Hodge will depend on whether you are a new or existing customer and whether your enquiry relates to a savings, mortgage, or annuity product.

    Find out how to contact Hodge here.

    Common Questions

    What Is Hodge Equity Release and How Does It Work?

    What Are the Interest Rates for Hodge Equity Release?

    How Safe is Hodge Equity Release for Homeowners Over 65?

    Can I Avail Hodge Equity Release If I Have an Existing Mortgage?

    What are the Pros and Cons of Using Hodge Equity Release?

    Is Hodge a Real Bank?

    Who Owns Hodge?

    Is Using Hodge Safe?

    Is Hodge a Member of the Equity Release Council?

    How Can I Be Employed by Hodge?

    Does Hodge Offer Retirement Mortgages?

    Does Hodge Offer Lifetime Mortgages?

    In Conclusion

    Although Hodge Bank is not a large financial institution, it is a specialist in the few niche markets it serves and is highly rated by customers.

    Hodge was the first financial institution to offer equity release in the UK36, and while its equity release products are temporarily on hold, it aims to offer these products again in the future.

    If you would like to know more about the retirement mortgages that form alternatives to Hodge equity release, you can view the list of financial advisors who may recommend these products.

    The features mentioned and the amounts raised, are subject to the lender’s criteria, terms and conditions. These may take into account the age, health and lifestyle factors in order to provide an enhanced amount. To understand the features and risks, ask for a personalised illustration.

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