Home Plus were the only provider of Equity Release Home Reversion products for people over 55 in Ireland, but recently folded up their tent after running into trouble with Irish government red tape leaving the Spry finance as the only equity release option in Ireland. In our Home Plus Ultimate Review – Ireland 2022 we give you the inside track on home reversion plus what the options and alternatives are.
Home Plus are regulated by the Central Bank of Ireland and have been offering Equity Release products in Ireland for over a decade. When the Irish government introduced tax changes in late 2021 aimed at penalising ‘cuckoo funds’ Home Plus found themselves accidently caught up in the net.
The tax changes penalised anyone with more than 10 properties, which given Home Reversion involves a company taking stake in several properties to return equity to each home owner, put the kibosh on the whole home reversion business model.
Given Home reversion can help people get on the property ladder or get out of debt, it can only be hoped this can be rectified at some point in the future to allow this offering back into the Irish market.
Equity Release comes in two flavours,
- Lifetime Loan – You get a tax free loan which you pay off plus interest when you sell after moving out or dying.
- Home Reversion – You get a tax free lump sum for selling a portion of your home and are able to continue living there.
Note: The Home Plus, Home Reversion product is currently not available, it is understood that this is due to recent changes made to stamp duty legislation. If and when the product is relaunched this review will be updated accordingly.
If you want make sure you will have equity left in your home when you move out or die home reversion beats lifetime loans. This is because the proportion of your home you are giving up is agreed up front. With lifetime loans the proportion of your home given up increases the longer you stay in your home.
With home reversion you sell a % of your home to release cash, but hold onto the rest and can live in the home till you permanently move out or die. Home Plus are the only current provider of home reversion products in Ireland.
Here’s how the Home Plus home reversions work in principle,
- You sell a share of your home to Home Plus for a lump sum in return
- The older you are the less of a discount to market rate you will receive when you sell
- You continue to live in the property as long as you wish, with Home Plus getting a proportion of the sale proceeds when you or your estate sells the property
You can set up a Free consultation with Qualified Financial Advisor here.
Read on to get all the facts and figures on Home Plus and home reversion equity release to see if it might be a good fit for you.
- Home Plus Rate and Product Overview – Home Plus Ireland 2022
- Pro’s & Con’s – Home Plus Ireland 2022
- Tips – Home Plus Ireland 2022
- Alternatives – Home Plus Ireland 2022
- In a Nutshell – Home Plus Ireland 2022
Home Plus Product Overview – Home Plus Ireland 2022
Home Plus are the only providers of home reversion products in Ireland and have been in Ireland for over a decade. They are regulated by the Central Bank of Ireland.
They are a sister company of retirement bridge in the UK who are the UK’s largest administrators of home reversion products.
Home Plus Home Reversion Product
Home reversion is a form of equity release where you sell a portion of your home to a provider in return for a cash free lump. In the UK home reversion makes up over 10% of the Equity Release market.
With a home reversion you can choose to either to just take the lump sum with no monthly payments or to increase the lump sum size ‘boosting’ by committing to make monthly payments.
Unlike with a Lifetime Loan the Home Plus Equity Release product caps the share of the property that you give up at the start. This guarantees that you will own the remainder allowing you to pass on a share to your family if you wish when you die.
How much lump sum can I access from Home Plus?
The minimum lump sum is €50,000 with no maximum lump sum in theory as it depends on the value of your home.
In practice the maximum lump sum you can receive is 70% of the current market value of your home which is then discounted depending on your age.
If you’re in your early 60’s then the discount on the lump sum is around 50%, as the provider expects their cash to be tied up in your home for quite awhile.
If you are in your 80’s though you will get closer to the market value as your lump sum as the provider doesn’t expect you or their investment to be in your house for as long.
In actual fact the level of discount is set by the youngest resident on the deeds, as that is what will drive how long Home Plus will have to wait for the sale of your home.
Example use of Home Plus for Home Deposit
Eileen is 75 and has a house worth €700,000. Under the terms of the Home Plus home reversion, she is entitled to sell 70% of her home to Home Plus.
Her son Mark is looking to move house as the kids are getting bigger. Eileen wants to help her son and decides to gift Mark €175,000. Eileen sells 54% of her home to Home Plus to raise the €175,000 she needs to gift to Mark.
As the €175,000 is under the current parent /child CAT threshold amount of €335,000 there is no taxes involved and Mark can use the €175,000 plus a mortgage to buy a larger home.
Home Plus Discount Rate
The big drawback of home reversion is the steep discount that applies when you sell your share to Home Plus in return for a lump sum.
This depends on your age, at 55 you will only get around 23% of the market value for the share you sell, while at 75 this climbs to around 50%.
The good news is that you will get around 5% more if the youngest home owners is male, but the bad news is that this is because the provider thinks it is more likely that you will die earlier.
The discounts are so big, because of the amount of risk the provider is taking on versus the risk the home owner is taking.
You get your hands on the cash and know exactly how much equity you are giving up, but the provider doesn’t know when the property will sell or what state the housing market will be in when that happens.
Qualifying for Home Plus
To qualify for a home reversion
You must be:
- The registered owner(s) of the property
- All owners must be sellers, i.e. sign the home reversion agreement
- The youngest owner must be over 55
the Property must be
- Your main residence (and not used for any commercial purpose)
- Any outstanding mortgage must be cleared from the proceeds of the sale
- Worth at least €120,000
Home Plus Home Reversion Terms
As part of the home reversion agreement you have the option to buy back the share you sell to Home Plus at the market rate at any time. This can make sense if for example you decide to downsize your home at any point.
Your estate also has first option to buy back the share at the market rate from Home Plus after your death if they wanted to keep the family home.
If the option is not exercised the house will go for public sale with each party receiving their share of the proceeds on sale.
Pro’s & Con’s – Home Plus Ireland 2022
So here’s some of the key things to consider when thinking about getting a home reversion without monthly payments
Pro’s
- You can access cash now and continue to live in your home
- You can’t lose your home while you live there, it’s insured and in good condition
- You know in advance how much you are leaving to your kids
- You are free to do whatever you like with the cash you free up
Con’s
- Discount to market value reducing the overall value of your estate
- Set up costs of around €1,500 in total, for Solicitor and Valuer fees.
- Potential impact on means tested social security benefits
- If property prices rise you will only get the benefit on your share
Home Reversion Tips – Home Plus Ireland 2022
1) Release your equity in phases
If you are thinking about a home reversion you don’t need to take it all out at once. By taking it out over time you can reduce the overall amount of discount to market value you receive.
There is no point in having cash from your home reversion sat in the bank not being used and earning no interest. So only take out what you need at each stage.
2) Talk to those who might be effected
If your thinking of Equity Release it may make sense for you to talk to members of your family who may be effected.
There is obviously no legal reason you have to discuss your decision with them, but it can save some heartache when your decision to take equity release comes to light later on down the track.
3) Get advice
Equity Release is a big decision and you should get advice and guidance through the process from a qualified financial advisor and a solicitor.
If you use a qualified financial advisor who has an appointment with Spry Finance or Home Plus from the Central bank of Ireland they will probably be free to use, as the providers will cover their costs. You can get in touch with a qualified financial advisor who can talk you through how to get a equity release here.
You will have to pay for a solicitor, with fees ranging from €1,350 to €2,500 depending on who you use. We recommend Jacob Law who have a flat all in fee of €1,350 including VAT for equity releases, as they have the lowest fees, specialise in equity release arrangements and operate nationwide. Please quote moneysherpa if you want to secure the best rate.
Alternatives – Home Plus Ireland 2022
The other main form of equity release is lifetime loans, where you borrow against the equity in your home. You can check out our article on Spry Finance lifetime loans here or our article on equity release here were we weigh up the pro’s and con’s of each option.
In a Nutshell – Home Plus Ireland 2022
Equity release is growing in popularity if you’re over 55 as a way to free up much needed cash from your home and still continue to live there. If you’re under 55 the equivalent is a top up mortgage.
You can use it for yourself or to free up cash for your kids, often to help them get on the housing ladder. It is relatively costly compared to downsizing so you need to weigh the pros and cons of both.
If you do want to go ahead with equity release you should get qualified financial advice.
One of the two most popular ways to release equity is through a home reversion, the only provider of these in Ireland right now is Home Plus who are regulated by the Central Bank of Ireland.
Next Steps – Home Plus Ireland 2022
You can get in touch with a qualified financial advisor who can talk you through how to complete a home reversion here or you can check out moneysherpa’s own in house broker teams the mortgage sherpas here.
The other main form of equity release is lifetime loans, where you borrow against the equity in your home. You can check out our article on Spry Finance lifetime loans here or our article on equity release here were we weigh up the pro’s and con’s of each option.
We have loads more in our mortgage provider reviews here.
If you want to have a chat and talk it through you can click for a mortgage check up with one of our sherpas here.
You can get more detail on lifetime loans, home reversion and equity release from the CCPC [1].
