Scottish Widows Bank has reduced the interest rate on its Home Equity Loan from 8.19% to 7.75%....
Scottish Widows Bank has reduced the interest rate on its Home Equity Loan from 8.19% to 7.75%. The group explained the cuts were made possible by employing, what it calls, market-leading treasury techniques.
Rob Golbourn, Managing Director of Scottish Widows Bank, commented: "We have been working with the Treasury and Group Balance Sheet Management at Lloyds TSB to develop this highly innovative risk-management technique which we believe gives us a real competitive edge in the market and which competitors will find hard to match. We are immediately passing the benefit on to customers and we are delighted to say that we are reducing the rate for borrowers already on the books as well as for new business".
The rate is fixed for the full period of the loan and borrowers have the option of paying the interest or allowing it to roll up against the value of the property. Scottish Widows claims the loan allows home owners over 60 to release capital tied up in their home.
Scottish Widows said it guarantees lifetime security by allowing the borrower to live in their property until either the house is sold, they move into long term care or on death. It is guaranteed that the borrower will never have to pay back more than the open market sale of the property.
Equity Release Loans will be included in Mortgage Regulation with effect from August next year and they could also be covered by the voluntary Mortgage Code of the Committee of Mortgage Lenders.
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