10 min read

Homeowners taking control of their capital

Posted in: Products

More than half of OneFamily Lifetime Mortgage customers now opt for flexible interest payment loans.

  • OneFamily’s interest payment lifetime mortgages allow up to 100% of the interest to be paid, protecting all the equity remaining in a property
  • Interest can be paid monthly or as and when the customer wants to make a payment
  • More than half (54%) of OneFamily’s customers are now taking advantage of an interest payment lifetime mortgage
  • By enabling homeowners to pay off the interest, the mortgage addresses one of homeowners’ biggest concerns that capital will be eroded in their property

With OneFamily Lifetime Mortgages, advisers can give their clients the option to pay off up to 100% of the interest on their loan either monthly or as and when they want and protect the capital that is left in their property.

OneFamily has led the move to interest payment lifetime mortgages and now over 50% of mortgages taken out are where the interest is actively managed. The product is particularly suitable for homeowners who have a monthly income but are looking to access a lump sum from their property, whilst retaining the capital in their home, often to ensure they leave an inheritance to family members.

To give an example, if a homeowner takes out a OneFamily Interest Payment Lifetime Mortgage for a loan of £78,000 at the age of 68[i], if they die at 82[ii] with a fixed interest rate of 5 per cent, they would need to pay £325 a month to leave only the original loan amount to be paid[iii].

OneFamily also offers customers the ability to make the payment as and when they wish if they have a variable monthly income.

Nici Audhlam-Gardiner Managing Director of Lifetime Mortgages at OneFamily comments:

“The lifetime mortgage market is growing and attracting a diverse group of clients who want products to suit different needs. At OneFamily we want to help advisers support the changing demographics of lifetime mortgage clients and we aim to make our products as flexible as possible.

“Our interest payment products attract those homeowners who have a regular income from pensions and other savings but require a lump sum. They can afford, and would prefer to make interest payments than have the interest roll-up. In some cases, the homeowner themselves pays the interest, and in some cases, other family members who may have benefited from the lump sum, such as for a deposit on a first home, pay for it on behalf of the homeowner enabling wealth to be shared across the family.

“These different ways of taking advantage of the capital in your property shows the innovative ways lifetime mortgages can be used and with providers like us coming to the market with new products, homeowners over 55s should increasingly consider how they can use equity release to fund their lifestyle.”

To find out how your clients can benefit from a OneFamily Interest Payment Lifetime Mortgage visit:  https://www.onefamilyadviser.com/lifetime-mortgages/calculator/

[i] The Average age of a OneFamily Lifetime Mortgage consumer
[ii] The average life expectancy in the UK – https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/20132015
[iii] This based on a property worth £438,000 the average property worth of an interest payment mortgage taken with OneFamily