A lifetime mortgage which has no early repayment charges (ERCs) has been launched today by more2life.
The product, which sits within the equity release market, is aimed at borrowers who have an immediate financial need but who think their circumstances may change in a period in which ERCs may apply.
More2life said it was a ‘one of a kind’ offering in the lifetime mortgage market. As well as no ERCs, the plan also allows customers to downsize from day one. This means, if they wish to move to a smaller property outside of the lender’s criteria, they can repay the loan in full without incurring ERCs.
Named, the Maxi Zero ERC, the deal is available to people aged between 55 and 89 years old. There is no partial repayment limit – the client is free to repay their lifetime mortgage in full at any point without incurring an ERC. There are also drawdown options available.
Rates start at 6.77% MER and there’s an arrangement fee of £1,199 for the initial advance and £499 for any further advance.
The lifetime mortgage is currently available through a limited number of distributors including Air members and selected specialists, such as The Later Life Lending Network, Key, and Mortgage Advice Bureau (MAB).
Ben Waugh, managing director of more2life, said: “We believe it is a complete game-changer for the lifetime mortgage market, advisers, their clients, and the wider later life lending space.
“To have a product with no ERCs is going to provide advisers with an enhanced option, especially those who have homeowner clients whose circumstances might change within a relatively short space of time. Not only could this product provide the finance the client needs from the outset, but it also allows them to pay off their lifetime mortgage at any point with no charges at all. This is something that has been unheard of within the later life lending sector up until now.
Mark Gregory, Founder & CEO of Equity Release Supermarket, said: “From a practical perspective, we’ve already seen how this supports customers considering a lifetime mortgage who expect their circumstances to change in the period where an early repayment charge would usually apply, after already discounting downsizing and other mortgage alternatives.
“It also endorses how our market continues to evolve in line with the changing needs of consumers.”
