The new product sits between an interest-serving mortgage and a full roll-up lifetime mortgage
Later life lender more2life has launched its latest product, the Flexi Payment Term Lifetime Mortgage (Flexi PTLTM), providing an alternative between traditional interest-only mortgages and full roll-up lifetime mortgages, catering specifically to individuals aged 55 to 62.
The Flexi PTLTM allows for partial interest payments, enabling customers to qualify for higher loan-to-value (LTV) ratios than those typically available with full roll-up mortgages.
Under the Flexi PTLTM plan, borrowers are required to make contractual interest payments until the age of 66, after which the mortgage transitions to a roll-up scheme where interest accrues until the loan is repaid. The structure also permits additional voluntary payments to reduce the overall cost of borrowing.
One of the key benefits highlighted by more2life is the potential for borrowers to access higher LTVs or decrease their total borrowing costs compared to standard lifetime mortgage products.
Eligibility for the Flexi PTLTM is subject to individual circumstances and affordability, with advice required for application. The product also features a No Negative Equity Guarantee, ensuring borrowers or their estates will not owe more than the property’s value upon sale, though terms and conditions apply.
“As the later life lending market grows, the needs of our clients have changed,” said Ben Waugh (pictured), managing director at more2life. “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. While 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.”
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