The Just For You Lifetime Mortgage is the latest product to launch in this evolving market aimed at homeowners who want to release equity from their homes to boost their retirement income.
While there are many equity release or lifetime mortgages on the market, this one separates itself from the rest, said provider Just Group, because customers who pay more interest per month receive a discount to the rate they pay overall.
Indeed, these tiered interest servicing options also mean customers can – if they wish – choose to pay no interest.
In another feature, which Just said was unique to this product, customers choosing to pay interest can take a payment holiday of up to three consecutive months each year.
What’s more, they can also opt to make up to six overpayments per year of up to 10%. The maximum currently offered by other lenders, said Just, was four overpayments.
Paul Turner, managing director of retirement lending at Just Group, explained for those who decided to repay some or all of the interest, the potential savings over the lifetime of the loan could be huge.
He said: “The tiered rates provide an incentive for borrowers to make interest payments and the reduction in interest payment is a unique feature in the market.”
He added: “We know clients have a diverse range of circumstances and requirements so the aim is to provide a single solution with choices enabling advisers to tailor the solution for their clients.”
Getting advice
Homeowners considering taking out equity release or a lifetime mortgage are urged to get professional advice before proceeding.
Will Hale, CEO at independent equity release adviser Key, the new options offered as part of the Just For You Lifetime Mortgage were a welcome addition to a market where customers were increasingly looking for flexibility in how they managed lending in retirement.
He added: “In an ever more complex product landscape, good advice remains key and these new products from Just further emphasise the need for customers to talk to a specialist who can search the whole market to compare and contrast the options available and ensure a solution tailored to their individual circumstances”.
