Rates begin at 5.25% for variable products which can be taken out for five years up to 15 years; the maximum term allowed for a mortgage. Fixed rates are available over three and five years at 5.50%. All products are available up to 50% loan-to-value.
The products are initially available to brokers through specialist adviser firm Key Retirement, but distribution will be expanded under tightly controlled conditions over a period of six months.
Maeve Ward (pictured), managing director, residential mortgages, said there was no need to have equity release permissions to advise on the product as it was a conventional mortgage. However, Ward stressed given the nature of this type of lending and customers’ circumstances, the product should be considered holistically and advisers may wish to consider speaking to an equity release adviser prior to making a recommendation.
Since then, the maximum age of the of the 55 Plus Interest Only range has been increased from 80, in the development stages, to 85 at launch.
Ward said: “For many, the prospect of selling a cherished family home when an interest-only deal is coming to an end is an emotional wrench, especially when the ability to continue paying a mortgage remains. We are thrilled to offer a lifeline to this underserved sector with Shawbrook’s new 55 Plus Interest-Only Mortgage.”
She added: “This new product not only provides peace of mind to those who do not want to sell their homes, or withdraw from their pensions, but also gives them the opportunity to borrow further to fund their future plans.”
Borrowers can capital raise for almost any purpose including debt consolidation which is capped at £30,000.
At inception the main earner can be between 55 to 75-years-old and with a minimum income of £16,500. The property must be worth at least £225,000.
Loans can be advanced from £25,000 up to £1m.
The complex mortgage range, expected to be launched this year, is being designed for underserved consumers such as homeowners who are currently mortgage-free, have been declined on age, those with a failed credit score or someone who has incurred late payments on credit cards.
Speaking at the time of the interview, Ward said: “This type of borrower profile is more suited to a second charge lender so we thought, why not offer them a first charge.”