Equity release provider Stonehaven has launched a specialist equity release mortgage for the over-55s, enabling the borrower to pay the loan back in full like a conventional repayment mortgage.
The Stonehaven product range, the Voluntary Select Options, allows homeowners to release lump sums of up to £4 million from the home they own (dependent on the borrower’s age and property value).
The product allows flexible contributions which can be paid in unlimited instalments during the year. It’s been introduced in response to high demand from clients who wish to pay off all of their loan rather than only servicing the interest.
Each year, lifetime mortgage holders who take this product can pay back up to 10 per cent of the initial loan amount without any early repayment charges. The minimum payment is £50 and unlike other products on the market, unlimited and flexible payments can be made throughout the term without the pressure of having to make regular monthly payments, giving older borrowers more control of their monthly budget.
There are two versions of the product: the Voluntary Select Lite and Voluntary Select. They differ in the amount of equity which can be released and the interest rate charged.
Alice Watson, product and communications manager at Stonehaven, says the new product will open up the lifetime mortgage market to older borrowers who are denied access to conventional mortgages.
“The extra flexibility of the Voluntary Select Option means that there is no penalty for missing a payment and borrowers do not need to go through the normal mortgage affordability checks,” she says.
“Without the worry of the ‘monthly payment pressure’, borrowers can choose to make one payment or one hundred, skip a year or even more if they wish but also have the flexibility to make payments as, when and if it suits them.”
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