New lender One Family to launch inter-generational mortgage
One Family, the result of a merger between Family Investments and Engage Mutual, said families are increasingly looking to defend equity and keep ‘wealth cascading down the generations.’
It said the new-style mortgage should be unveiled in the next three months.
Today’s 60-somethings, who paid an average of £12,704 for their first home in 1976, will have seen their investment rise 20-fold in value this year reaching £292,000 with an annual growth rate of 8%, according to the Office for National Statistics.
The lender is ramping up its plans to lead innovation in the equity release market after its launch of two lifetime products in early May.
The initial range included an interest roll-up product and a roll-up voluntary payment option, which allows the customer to repay 10% of the initial loan each year, without incurring an early repayment charge (ERC).
The fixed interest roll-up product starts from 4.98% with variable interest rates offered from 2.96%, while the roll-up voluntary payment option will attract fixed interest rates from 5.45% or variable interest rates from 3.44%.
The range also offers a down-sizing guarantee, fixed-term early repayment charges and the ability to stop paying interest and switch to one of OneFamily’s other products.
Georgina Smith, managing director of OneFamily Lifetime Mortgages, said: “We want to help grow the market. These products will complement OneFamily’s vision to enable families to work together to meet the financial demands of modern life.”
OneFamily also confirmed plans to launch a fixed and a variable rate product linked to the Consumer Price Index.