These products are designed to bridge the gap between mainstream mortgages, where all interest must be covered by the borrower each month and lifetime mortgages where the interest is rolled up and paid from the eventual sale of the house
More2life has launched its first flexible Payment Term Lifetime Mortgage (PTLM).
These new-style products are designed to connect mainstream mortgages, where all interest must be covered by the borrower each month and lifetime mortgages where the interest is rolled up and paid from the eventual sale of the house.
More2life’s Flexi PTLM is aimed at customers between the ages of 55 and 62 who can afford to cover some of the interest costs, permitting them to borrow at a higher loan-to-value than they would otherwise be able to access via traditional lifetime mortgage.
Borrowers can choose between a choice of different payment levels to commit to subject to what they can afford and these each correspond to a different loan-to-value.
The launch follows a recent change in the FCA handbook for products of this type.
Under the new Flexi Payment Term Lifetime Mortgage plans, borrowers commit to set level of interest payments until they reach 66, after which interest is rolled up as it would be with a traditional lifetime mortgage.
On top of this, borrowers can choose to make extra voluntary payments if they want to lower the long-term cost of borrowing.
The product might also appeal to those who can already attain higher loan-to-value mortgages, but want to lower the impact of interest being rolled up.
Borrowers can only apply for the product with the help of an adviser.
The Flexi Payment Term Lifetime Mortgage is protected by a no negative equity guarantee in common with other equity release mortgages.
More2life MD Ben Waugh comments: As the later life lending market grows, the needs of our clients have changed.
Waugh adds: We are committed to developing new products to support people who might otherwise be underserved by the industry.
