The new product offers discounted rates to customers who commit to a payment plan
Equity release lender Standard Life Home Finance has enhanced its Horizon later life lending offering with a discounted rate opportunity for customers willing to commit to agreed regular payments over a specified period.
Interest Reward targets equity release customers who opt for regular payments rather than the traditional voluntary model. This approach, the lender said, not only allows borrowers to mitigate compound interest but also holds appeal for those venturing into equity release for the first time.
Customers opting for agreed regular payments can unlock discounts based on the percentage of interest served and the duration of the contractual term. For instance, committing to a five-year payment plan covering 50% of the interest owed could yield a discount of 0.05% over time.
The product will be available on Horizon 300 and above plans and will accept applications from individuals aged between 55 and 84. Borrowing purposes include remortgaging, property purchases, capital raising, and debt consolidation.
For clients who are willing and able to commit to making set monthly #interestpayments, they will be rewarded with a discounted interest rate for the duration of their #lifetimemortgage.
— Standard Life Home Finance (@standardlifehf) February 5, 2024
Find out more about Horizon Interest Reward https://t.co/t26750pn9l #laterlifelender pic.twitter.com/iWVOaqUxHU
Additionally, the offering includes a standard No Negative Equity Guarantee, ensuring that neither the applicant nor their estate will incur a debt surpassing the property’s market value upon sale.
Clients will also have the flexibility to make additional voluntary partial repayments. Within a non-overlapping 12-month period, they can repay up to 10% of the initial loan without facing additional early repayment charges.
“As the later life industry continues to evolve in lockstep with customer demand and regulatory reform, the need for a more diverse and comprehensive product offering has never been more profound,” said Kay Westgarth (pictured), sales director at Standard Life Home Finance.
“We are thrilled to be able to offer this new Interest Reward product to customers, providing a payment option that rewards customers who commit to regular payments with a discount on interest rates. Given the current climate, this payment plan is our way of ensuring equity release customers can access the rates that best suit their individual financial situation.
“We look forward to working closely with advisers to ensure our equity release customers can take full advantage of the Interest Reward product, whether it’s to bolster their current finances or to fund a comfortable retirement. A contractual payment plan may not suit everyone but it’s our duty to ensure that we continue to support the unique needs of a wide range of customers and their differing financial situations.”
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