MEX has launched its ‘Lifetime Mortgage’, aimed at those looking to unlock a relatively small amount of money, and rebranded its existing product as ‘Lifetime Mortgage Extra’, which offers slightly higher loan-to-values (LTVs).
The ‘Lifetime Mortgage’ product has a maximum LTV beginning at 18 per cent for under-60s and increases to 45 per cent for the those 90 years-old and over. The ‘Lifetime Mortgage Extra’ product has an LTV starting at 25 per cent for under-60s, moving up to 55 per cent for those above 90.
Roger Hillier, lifetime product development manager at MEX, said: “The new ‘Lifetime Mortgage’ is a response to market demand by those who want to borrow but don’t want the higher loans that are available through conventional lifetime mortgages. This and our ‘Lifetime Mortgage Extra’ product, means we can now cater for a broader section of the marketplace, giving increased choice to consumers and advisers.”
The ‘Lifetime Mortgage’ has a fixed rate of 5.99 per cent and is available with an advance of up to £500,000, while the ‘Lifetime Mortgage Extra’ product is priced at 6.35 per cent.
Both products also have a no negative equity guarantee, meaning borrowers will only owe the value of the property.
Stuart Wilson, managing director of Equity Release Advisory Service, said: “From our experience, less people are going for higher advances and the majority are going nowhere near the maximum advance. There is the worry the money is being withdraw for the wrong reasons, with it being put into savings accounts or bonds.
“However, by default, the advent of drawdown mortgages makes equity release a more compliant product as people can take out smaller amounts. It also shows the maturity of the market that providers are now competing on product differentials, rather than just on price.”
