More2life, the later life lender, has launched its Flexi Interest Reward feature, a lifetime mortgage based on assessing client affordability with rates determined by their ability to make payments each month.
While advisers are expected to assess affordability for the product, it’s not based on the client’s credit score and the home won’t be repossessed if they stop making payments early.
The interest rate discount available to each Flexi Interest Reward client is bespoke, with a personalised payment schedule based on how much they want to pay and for how long, and is in place for life as long as all payments are made. At time of launch, rate discounts typically range between 0.05-0.75%.
Clients can choose to pay more than 100% of the plan’s monthly interest and typically would receive a bigger interest rate discount for doing so.
Clients can also – in addition to the agreed monthly payments – choose to make overpayments to help further reduce the cost of the borrowing; monthly payments and overpayments combined are allowed up to 10% of the initial loan amount each year during the early repayment charge (ERC) period.
Available to clients aged between 55 and 82 plus 364 days, Flexi Interest Reward comes with a maximum LTV of 48%, has an ERC period of 15 years, and meets the Equity Release Council standards for lifetime mortgage products.
Commenting on the launch More2life chief executive Dave Harris said: “We continue to look at the ways and means by which we can offer bespoke, personalised solutions to lifetime mortgage customers, not least so they have full control over the payments they make and certainty on the discounts they receive, allowing them to manage their finances much more effectively.”
He added: “Flexi Interest Reward does all this, and then some, allowing the adviser to assess affordability and – in a first for this sector – allows them to secure personalised pricing at that moment in time, in order to ensure we can provide as competitive a rate as possible.
