12 min read

OneFamily announces intention to enter Lifetime Mortgage market

Posted in: Products

OneFamily, the modern mutual, has announced its intention to enter the fast growing Lifetime Mortgage market during the first half of 2016 with a unique product offering.

The launch, which is subject to regulatory approval, will see OneFamily become one of the most flexible Lifetime Mortgage solutions providers in the market, offering a family-focused range of products.

The new products will be structured to enable families to protect their inheritance and to make the most of their greatest asset, their home.  Customers and their families will be able to pay some or all of the interest each month; flexibility which will help to avoid any negative impact of rolled-up interest.

OneFamily recognises that a client’s circumstances may change during the lifetime of their loan.  For the first time in the lifetime mortgages sector, the products will offer variable interest rate pricing, linked to the Consumer Price Index, alongside the traditional fixed rate options.  They will also offer simple fixed term Early Repayment Charges, a down-sizing guarantee and the option to stop paying interest and to switch to one of OneFamily’s other products.

The products will only be available via intermediaries and their unique features, allied to OneFamily’s flexible approach such as including family member contributions in any affordability assessment, will allow advisers to provide a solution precisely tailored to the needs of their clients and their families.

Simon Markey, CEO of OneFamily said:

“Families are turning to each other more and more to plan for and manage life’s milestone moments. We understand the aspirations of families alongside the financial pressures they face; whether that’s helping children get on the property ladder or trying to fund a secure retirement.

“The lifetime mortgage market is growing rapidly, as more homeowners over the age of 55 make use of their housing wealth to support their finances in later life.  In the final quarter of 2015 there was a record amount of housing wealth unlocked via drawdown lifetime mortgages, pushing annual equity release lending to a new high of £1.61 billion1.

“OneFamily is the modern mutual designed to help families who want to help each other meet the financial demands of modern life.  With that as our driving ambition and strategy it is only natural we should seek to enter the Lifetime Mortgage market and to do so in such an innovative way.

“Lifetime mortgages are a natural extension for OneFamily. These new products will allow an intermediary’s clients and their families to make the best use of their most valuable asset, their home.”

Leading this venture will be Georgina Smith, appointed by OneFamily as the MD of OneFamily Lifetime Mortgages, which will operate as a separate business unit under the authority of the OneFamily Group.  Georgina has a wealth of experience in the lifetime mortgages sector, as both CEO and Sales and Marketing Director at Stonehaven.  She brings with her a strong and experienced leadership team to head up OneFamily Lifetime Mortgages.

Georgina Smith, Managing Director at OneFamily Lifetime Mortgages said:

“Our unique proposition recognises that many people approaching retirement with interest-only mortgages will be coming to the end of that product, still in debt, yet unable to re-mortgage to pay that down.  Our products will solve that problem ensuring that people can stay in the homes that they love with manageable finance they are able to afford.

“OneFamily Lifetime Mortgages would give homeowners the chance to help their families to get on the housing ladder and with the Department of Work and Pensions calculating that 11 million of us are facing inadequate retirement incomes 2, these products could also provide funds to address this pension funding gap.”

All of OneFamily’s plans will be underpinned by The Equity Release Council safeguards and will be based on the highest ethical standards as befits a mutual organisation.

1 Source: http://www.equityreleasecouncil.com/document-library/equity-release-market-report-spring-2016/ermr-issue-5-04-digital.pdf
2 Source: Gov.uk Estimates of the number of people facing inadequate retirement incomes PDF