Later life lender More2life has launched its lifetime mortgage product, Tailored Interest Reward.
The lender said this would give borrowers more control over costs through a product that allows them to adjust their monthly payments and the payment term.
The Tailored Interest Reward is available on lump sum or drawdown options and offers interest rate discounts of up to 0.65%, which can be secured with just a part-interest payment of at least 25.01% of the full interest.
The product is available on different plans from C3 to C8 at a maximum loan to value (LTV) of 38%. A rate discount of 0.3% is available at C3, up to 58.4% LTV, while the discount at C8 is the full 0.65%.
The product has no fixed term, and borrowers can choose how long to make payments while accessing the rate discount for that period.
When the agreed payments stop on any part of the loan, the interest rate reverts to the non-discounted rate.
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With drawdown options, the borrower can include the Interest Reward feature when accessing the drawdown facility in the future or decide to make ad hoc payments.
This product follows More2life’s launch of its Flexi Interest Reward deal, which is based on live pricing rates and a borrower’s ability to make payments each month.
A focus on affordability
Dave Harris (pictured), CEO of More2life, said: “The launch of Tailored Interest Reward sits firmly within the requirement for advisers to conduct a full affordability assessment for each potential later life lending client, and we would encourage all advisers to do this in order to ensure the payments and target term remain affordable throughout this period.
“Tailored Interest Reward offers a number of positive features, not least the ability to secure an interest rate discount on both lump sum or drawdown, the segmentation of the product at different max LTVs and different maximum discounts, plus the fact the client can agree the length of term they wish to continue making monthly interest payments and at what level.”
He added: “Should the client then stop making interest payments, the product simply reverts to non-discounted rate, ensuring they maintain the benefits of the product, and they continue to have the full safety and confidence offered under the Equity Release Council standards, such as the no negative equity guarantee and retaining full ownership of the property.”
Harris said the lender’s latest launches showed it was focused on offering products that fit a borrower’s affordability, wants, needs and ability to make payments now and in the future.
He added: “With such options growing in number, and with more over-55s being suitable for these products, it’s absolutely imperative advisers not only conduct their affordability assessments, but that they have full access to all later life lending products available, both mainstream options and lifetime mortgages.
“Without understanding and being able to offer these, it’s impossible to say they have recommended the most suitable and appropriate option. We want advisers to be fully immersed in the later life lending sector and we want to work with them to ensure the client always gets the best advice and advisers can ultimately deliver a positive outcome.”
