Available on a lump sum basis, the product offers reduced interest rates to borrowers who commit to making regular interest payments.
Customers can choose to pay 25%, 50%, 75% or 100% of the monthly interest over a fixed term of five, 10 or 15 years. The level of discount depends on the proportion of interest paid, the length of the commitment and the loan-to-value (LTV) ratio.
Borrowers can cease making payments at any stage, although the preferential rate will be withdrawn if three payments are missed within a 12-month period.
LV= said the launch reflects growing demand for flexibility in later life financial planning. Research conducted by the provider found that 31% of UK adults consider flexibility an important factor when planning retirement income, highlighting the appeal of products that can adapt as circumstances change.
LV= said the product may be particularly suited to borrowers with a continuing income stream, those wishing to preserve a greater proportion of their estate for beneficiaries, and residential interest-only customers seeking a later life lending solution with added flexibility.
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Patrick Oldham, equity release proposition director at LV=, said: “I’m delighted that we have launched our new Lifestyle Interest Reward product to the market, further strengthening our equity release proposition and giving advisers greater choice when supporting clients with their later life lending needs.
“Our research shows that consumers value flexibility, security and the ability to remain in control of their home and finances. This product has been designed with those priorities in mind, rewarding customers who choose to make interest payments while helping them preserve more of their property’s value over the long term. Customers will also still benefit from a number of existing product safeguards such as security of tenure and the no negative equity guarantee.
“For advisers, it offers another valuable option for clients who want to access housing wealth without sacrificing flexibility, particularly those looking to manage interest costs and protect more of their estate for future generations.”
