The product by Standard Life Home Finance was launched in January this year and offers a rate discount for customers who are “willing and able to commit to making set monthly interest repayments for a specified term of their lifetime mortgage”.
The deal is targeted at equity release customers who can make regular payments instead of the traditional voluntary model.
The product has a 25% interest option, which will allow more customers to access the benefits through the plan.
Customers who commit to agreed regular payments will get discounts depending on the percentage of interest served and the length of the term.
By paying 25%, 50%, 75%, or 100% of the interest over a set time, customers can reduce their cost of borrowing.
As an example, if a customer commits to servicing 25% of the interest on a Horizon 300 plan, the customer can get 0.03% in five years, 0.06% in 10 years and 0.09% in 15 years.
The product is available on Horizon 300 plans and above, and is open to applications from customers between the ages of 55 and 84.
The deal has a standard no-negative-equity guarantee and customers can make additional voluntary partial repayments, with up to 10% of the initial loan being able to be paid back in a non-overlapping 12-month period with no additional early repayment charges (ERCs).
Kay Westgarth (pictured), sales director at Standard Life Home Finance, said: “As the typical profile of later life lending customers evolve, so too must the range of products available to them on the market. This latest update to our Horizon Interest Reward product will enable even more homeowners to reap the benefits of lower interest rates and larger discounts.
“The next generation of homeowners are likely to lean on later life lending to support their mortgage repayments throughout their life, and so we are committed to offering flexible and affordability-centred options. Advisers play a crucial role in laying out all of the options available to customers to make sure people take out the right products that meet their personal needs.”
