Costs
Charging interest
The loan will have interest charged on it in the same way a normal loan would be charged on money borrowed from the bank. The maximum interest rate that will be charged is fixed by the government. Currently the maximum rate is applied and may change 1st January and 1st July every year. This interest will be compounded on a daily basis.
The interest will apply from the day you enter the Deferred Payment Agreement. You will receive annual statements advising of the outstanding debt.
The rate of interest charged will be 4.05% as set by the Economic and Fiscal Outlook Report, and updated twice yearly.
Costs associated with the Deferred Payment Agreement
There are administration and legal costs of £700 for the provision of the Deferred Payment Agreement.
If the property is unregistered there will be an additional legal fee depending on the value of the property, or you can register the property yourself.
Valuation
On the first and second anniversary of the start date of the deferred payment we will complete an office-based valuation, free of change.
On the third anniversary of the start date of the deferred payment we will complete a full valuation, at a cost of £400.
Other options
You may choose to rent your property which may give you enough income to cover the full cost of your care. There are advantages to this as you will not accrue a debt, be liable to interest and administrative charges and your property will be occupied. Your tenant will be paying the utility and council tax bills which will reduce your outgoings.
You may choose to pay the full cost of your care from your available income and savings / assets, or a family member may choose to pay some or all of this for you.
If you choose to fully fund your care you need to contact the Care Home to confirm the weekly rate.