Its flexi payment term lifetime mortgage (flexi PTLTM) is for borrowers between the ages of 55 and 62 who can commit to serving part of the interest in order to access higher loan to value (LTV) options compared to what is usually available with a roll-up product.
More2Life will offer a range of repayment options and LTV tiers to suit each borrower’s needs.
At first, borrowers will have to make contractual payments of partial interest until the age of 66. Once this ends, the plan will continue as a roll-up mortgage. Additional voluntary payments can be made during the contractual repayment period or after it ceases.
The product can also be used by borrowers who are already eligible for high LTV lifetime mortgages on a full roll-up basis to reduce their overall cost of borrowing.
More2Life gave the example of a borrower releasing £67,210 from a property valued at £286,000. The flexi PTLTM paid at an interest rate of 6.11 per cent monthly equivalent rate (MER) will total £297,460 over 11 years. This is compared to the highest LTV lifetime mortgage at 8.79 per cent MER which will cost £393,796 over the same period.
The product is available on an advised-basis only and will depend on the borrower’s circumstances. The deal also includes a standard no negative equity guarantee.
Ben Waugh (pictured), managing director at More2Life, said: “As the later life lending market grows, the needs of our clients have changed. We are committed to developing new products to support people who might otherwise be underserved by the industry. Our flexi payment term lifetime mortgage offering partial interest serving is a new concept in later-life lending and is the initial step in our efforts to expand the range of later life products. Whilst the initial scope is limited, we expect to extend both age ranges and payment terms available during the course of 2024.
“It’s vital that everybody can access the best product for their individual circumstances, and advisers must be having in-depth conversations with their customers that cover the entire range of products on the market. Our flexi PTLTM product fills an important gap and will ensure that advisers can deliver fantastic outcomes for clients utilising affordability that a customer has for mandatory payments to access higher LTVs or reduce their total cost of borrowing.”
