Two of these are unique in the market and allow borrowers to release equity from investment properties or holiday homes. The three products are the Holiday Home Loan, the Landlord Loan and the Flexible Lifetime Mortgage.
Landlord Loan and Holiday Home Loan:
These two unique products were developed following extensive consultation with intermediaries specialising in investment property lending and will fill a gap in the market for over 60's who want to mortgage their investment properties rather than their home.
There is no need to make monthly interest or capital payments on Landlord and Holiday Home Loans, secured on investment properties in mainland England and Wales. These loans carry a no negative equity guarantee, which means the borrower (or estate) can never owe more than the value of the investment properties.
Unlike standard lifetime mortgages, both the Landlord and Holiday Home Loans are not repayable when the borrower goes into long-term care. The borrowers are therefore able to use the loan itself, or any rental income from the investment properties, to meet their costs of care.
Peter Lucas, Chief Executive, New Life Mortgages commented:
"We have consulted with introducers specialising in investment property lending (typically members of the National Association of Commercial Finance Brokers) to establish ready demand for our Landlord and Holiday Home Loans. According to our research, over 60s would prefer to mortgage their investment properties rather than the homes in which they live.
"As many of these borrowers have owned investment properties for some years, the modest loan-to-values allow a switch into a non-serviced loan, while still retaining ownership and any rental income, from the investment property."
Flexible Lifetime Mortgage:
The Flexible Lifetime Mortgage was developed in response to an increasing demand for greater flexibility and innovation in lifetime mortgages, with drawdown products now accounting for over one third of lifetime mortgage applications.
New Life's Flexible Lifetime Mortgage has a number of features:
- The loan allows borrowers to release capital from the home in which they live, utilising a proportion of the maximum borrowing at the outset, with the option to drawdown a further 'Flexible Portion' within ten years of the initial transaction.
- The flexible portion can be repaid and redrawn without early repayment charges.
- Borrowers can choose to drawdown either at the prevailing fixed rate or by opting for a Base Rate tracker capped at 8.99 per cent.
Peter Lucas, Chief Executive, New Life Mortgages commented:
"We believe the features of this flexible mortgage make an exciting addition to the lifetime mortgage market and believe this product surpasses the basic drawdown mortgages currently available.
"Our flexible loan also has unique features and offers borrowers certainty over future drawdowns. Unlike other flexible mortgage products in the market, New Life offers a future drawdown facility where interest can be either be fixed for life or provided on a Base Rate tracker capped at 8.99 per cent, plus the ability to withdraw and repay without any early repayment charges for ten years."
