Pure Retirement has launched an interest servicing option for its Heritage lifetime mortgage range, offering discounts to customer who make monthly payments on the monthly interest.
Interest rate discounts on the lifetime mortgage range will be available from 0.3% to 1% for customers making monthly payments from 25% to 100% of the monthly interest.
Customers can choose to stop making monthly payments at any time, or if they need a pause on making payments, they can secure a payment holiday of up to three months per year.
The interest servicing option is available for lump sum and drawdown lifetime mortgages, so it can be accessed on drawdowns and further advances.
Pure Retirement said that interest servicing for the Heritage range aimed to “meet the needs of a growing number of lifetime mortgage customers who have some income and wish to use it to reduce the cost of borrowing and preserve more equity for their estate”. Customers may want to pay for only a select period – for instance, until their retirement – with the reassurance they can stop at any time.
Pure Retirement introduced its Heritage range in 2019, and has since then increased the loan to value (LTV) and increased limits to over-80s.
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Chris Buchanan (pictured), Pure Retirement’s head of product, said: “The lifetime mortgage market is evolving to meet more diverse customer needs and circumstances. Our ambition was to develop a leading interest servicing lifetime mortgage, with interest rate discounts delivering meaningful customer savings, but at the same time keeping it simple for advisers and customers, with no complex payment term commitments to navigate.
“We’re also helping customers retain the discount for longer with up to three months’ payment holiday every year.”
