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Vernon BS launches interest-only equity release range

  • 26/08/2015
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Vernon Building Society dipped its toe into the equity release market with the addition of two lifetime interest-only mortgages to its product range.

The range, which the lender explained was introduced in response to a rising demand, includes two five-year discount lifetime interest-only mortgages, with one including a higher initial discount available to applicants that have registered a lasting power of attorney (LPA).

An LPA allows borrowers to appoint someone close to them to make certain decisions on their behalf, who can then manage any future finances should the borrower feel unable to make their own decisions in cases such as ill-health.

The Vernon’s LPA product comes at an initial rate of 3.7% which includes a 1.25% discount from its standard variable rate (SVR) of 4.95% for five years. The straightforward lifetime interest-only product starts at a rate of 4.45% which includes a 0.5% discount from the lender’s SVR.

Both deals are available at a maximum loan-to-value of 50% and on loans ranging between £25,000 and £250,000.

Borrowers will not incur an arrangement fee or any early repayment charges.

Ian Keeling, head of sales and marketing at the Vernon, said: “We developed these products to meet a rising demand. High house prices have left many people asset rich, however they may not have much money saved to do the things they want to do. Selling and down-sizing is an option, however people are often settled in their homes and do not want to move as this can mean leaving networks of friends and family behind.”

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