Fidelity Unveils Comprehensive Pep Mortgage Scheme for Young Homebuyers

Fidelity Investments, one of Britain's largest unit-trust companies, has launched a groundbreaking personal equity plan (Pep) mortgage scheme that could revolutionize the homebuying process for younger individuals. The innovative program, dubbed the Fidelity Pep Mortgage Plan, combines mortgage funding and life assurance with a Pep to repay the loan. This pioneering approach offers homebuyers flexibility, tax efficiency, and lower costs, making it an attractive option for those seeking to enter the property market.

Key Takeaways:

• The Fidelity Pep Mortgage Plan provides a comprehensive mortgage package that includes access to funding, life assurance, and a Pep to repay the loan.
• The Pep is more flexible and tax-efficient than endowments and can be used to repay the mortgage, offering homebuyers greater control over their capital.
• The mortgage funding and life assurance are provided through separate links with Bank of Ireland Mortgages and Zurich Life, while the Pep itself is offered by Fidelity Investments.
• Investors can choose from three investment funds, including a managed portfolio that spreads risk across various investments.
• The Pep's performance will be reviewed every five years to ensure it is on target to repay the mortgage, and investors can opt for automatic transfers to more stable investments during the final years of the plan.
• The initial charge on the Pep is competitive at 2% until August 1, 1994, and 3% thereafter.