New lifetime mortgage based on affordability comes to the market
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More2life’s new Flexi Interest Reward lifetime mortgage lets homeowners secure a lower interest rate based on how much you can pay each month.
With this new product, the more you commit to paying, the bigger the discount on your interest rate – helping to cut the cost of borrowing over time.
More2life say the goal is to give customers more control over their payments and discounts, making it easier to manage finances.
How does it work?
Flexi Interest Reward puts you in control of your lifetime mortgage payments, according to more2life. The more you choose to pay, the bigger the discount you can get on your interest rate. Here’s what you need to know:
- You choose how much to pay and for how long you want to make the payments.
- Pay just some of the monthly interest, 100% of it, or more than the plan’s monthly interest for a bigger discount. Minimum payment is £50 a month.
- Your discount is tailored to you – currently between 0.05% and 0.75%.
- Overpayments are allowed – during the 15-year early repayment charge period you can pay up to 10% of the initial loan each year with a combination of monthly payments and overpayments.
- When your payment term ends, your monthly payments stop but you’ll continue to receive the full interest rate discount for life (providing you make all of your pre-agreed payments throughout the payment term).
This new product is available to homeowners aged 55 to 82 and 364 days, with a maximum loan-to-value of 48%. It meets Equity Release Council standards, so you’ll never owe more than your home’s value, and your interest rate is fixed for life—as long as you keep up with payments.
More2life CEO, Dave Harris, said: “We continue to look at the ways by which we can offer bespoke solutions to lifetime mortgage customers, not least so they have full control over the payments they make and certainly on the discounts they receive, allowing them to manage their finances much more effectively.
“Flexi Interest Reward does all this, and then some, allowing the adviser to assess affordability and, in a first for this sector, allows them to secure personalised pricing at that moment in time, in order to ensure we can provide as competitive a rate as possible.”
