Case study – Example 3

Mr and Mrs Thompson have two children at private school and the annual fees are £30,000. They are finding this quite a stretch, so they decide to look at a Secta Flexiplan.

Their home is worth about £400,000 and their mortgage is £300,000.

Using the Secta Flexiplan calculator they can see that the maximum finance plan they could put in place is about £50,000.

They were hoping to borrow a bit more than this so they decide to enter their details into the Secta Advance Plan calculator instead and they can see that with an Advance Plan they could potentially borrow up to £100,000 and the monthly repayments over 20 years would be about £633 per month.

Although they would have preferred the flexibility of a Secta Flexiplan, they did not have quite enough equity in their home to borrow as much as they would have liked, so they decided an Advance Plan would suit them better.

The reason Mr and Mrs Roberts can borrow more on the Advance Plan than on the Secta Flexiplan is that with the Secta Advance Plan homeowners can borrow up to 100% of the equity in their home (i.e. Value of home – outstanding mortgage), whereas with the Secta Flexiplan, the maximum available is 75% of the equity in their home. So, although the Advance Plan does not offer the flexibility of the Secta Flexiplan, it can be a very good option for some people.

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