Lender says it's a UK first…
Later life lender more2life has launched the UK’s first lifetime mortgage with no early repayment charges (ERCs), offering older borrowers increased flexibility.
The Maxi Zero ERC product, unveiled today, is designed for clients who may face changing circumstances during the period when ERCs traditionally apply.
The product is based on more2life’s existing Maxi Super 1, 2, and 3 lifetime mortgage range, and is aimed at borrowers with immediate financial needs who want the option to repay their loan without penalties if their situation changes.
Maxi Zero ERC is available to clients aged 55 to 89, with loan-to-value (LTV) ratios ranging between 20.5% and 49.5%. Loan amounts range from £15,000 to £700,000, and borrowers are free to repay the mortgage in full at any time without incurring ERCs.
The product is compliant with Equity Release Council standards and includes drawdown options. An arrangement fee of £1,199 applies for the initial advance, and £499 for any further advances.
A key feature of the product is an indefinite ERC exemption for joint life cases, allowing the surviving borrower to repay the loan without charges if the first borrower dies or enters long-term care. The product also allows borrowers to downsize from day one, with the option to repay the loan in full without incurring ERCs if they move to a property outside the lender’s criteria.
Maxi Zero ERC interest rates start at 6.77% monthly equivalent rate (MER), and the product is available through a select group of distributors, including Air members and specialists such as The Later Life Lending Network, Key, and Mortgage Advice Bureau (MAB).
more2life described the product as a unique offering in the later life lending market, where standard ERCs typically last 10 to 15 years. The lender’s other recent product, Apex, carries a four-year ERC period with an LTV of up to 52%.
Ben Waugh (pictured), managing director of more2life, called the launch a “game-changer” for the lifetime mortgage market.
“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,” Waugh said. “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.
“The industry, as a whole, has been challenged to deliver the next generation of later life lending products for borrowers with a whole host of needs and circumstances which have not, and could not, be met by more traditional options. We certainly believe that with Maxi Zero ERC, and a number of other products we’ll soon be launching, more2life is delivering on this challenge.”
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