We wanted to create a home purchase model that is fair and affordable for our customers, which is why we chose to introduce a much loved feature known as the equity buffer.
We know unforeseen situations can arise, which can affect your circumstances in the short term, or possibly for a longer period of time. The loss of a job, an illness, or a sudden incident can affect whether you are able to work. We know how hard it can be in these tough situations. We’d like your rent payment to be the least of your worries.
Traditional banks and financial providers may offer you a payment holiday for a short period of time, with your missed payments spread across your loan term, increasing your monthly payments. Some others are even stricter and only provide a window of three payments before beginning the repossession processes.
We’re here to do things differently. To benefit our customers, we offer a feature known as the ‘equity buffer'. 👏
What this feature allows is the opportunity to fall back on your purchased equity in the event you’re unable to make payments. This means you can have comfort in knowing your rent will be covered and you’ll continue have a roof over your head.
How does our equity buffer work?
When you initially apply for a home purchase with us, we ask you to put some money towards the purchase of the property alongside us (for example 20%) - this becomes your share of equity in the home, also known as your initial equity.
If in any given month you are unable to make your rental payment, you can get in touch with us to trade a portion of your equity to cover the rent payment that is due.
Trading equity in any situation where you cannot pay rent will provide you the time and security you need to search for a new job, recover from illness, or resolve any personal situations you may be facing. We’ve calculated on average, 20% initial equity buffer could provide between 2-4 years of rent payments, if required. This would increase further if you purchase more equity as part of your regular payments.
To support you in instances of long-term illnesses or inability to work, we will allow you to utilise your equity if you wish to cover rent payments. This equity buffer has been created to ensure you have the security when you need it the most. We will always recommend only using this feature in times of great need - since your share of equity reduces as a result.
If you are worried about affording your rent payments, get in touch with us, we’ll help find a solution to suit you. Remember we are always here to help.
Finally, we always advise all our customers to seek independent advice so that you are satisfied before entering any home purchase or investment opportunity. Certified free money advice organisations include: Free and impartial help with money, backed by the government | MoneyHelper and Debt and money