Nationwide launches lifetime mortgage for older borrowers
The product is available from today to new customers and existing Nationwide members aged between 55 and 84. It will be distributed exclusively through Age Solutions, part of the Age Partnership Group. Advice when taking the product is free, though customers will be required to take independent legal advice.
Customers aren’t required to make any repayments during their lifetime. Interest is added to the sum borrowed, with a rate fixed for the term of the mortgage, and the total rolled-up amount is repaid only at the end of the customer’s life or if they go into long-term care. See YourMoney.com’s Lifetime mortgage guide for more information.
The fixed mortgage rates are divided into four tiers based on different amounts of loan to value (LTV) – starting from 3.80%.
There are no product, valuation or advice fees to the customer with loans available up to 46% LTV, with the amount available to borrow depending on age, the size of the mortgage required and whether it is a single or joint application.
Customers can take additional borrowing, port the mortgage if they move to a new property, or make partial repayments of up to 10% a year. There are Early Repayment Charges (ERCs) which are stepped and reduce over the first 15 years of the mortgage term.
As part of its entry into the equity release market, Nationwide has also joined the Equity Release Council.
The mutual said it aimed to help a broader range of customers wishing to borrow in later life so that they can unlock the often-substantial equity tied up in their property.
Last year Nationwide raised the maximum age on maturity from 75 to 85 for retired applicants with a stable income.
First high-street lender
The move makes Nationwide the only major high street mortgage lender to offer a product of this kind in the equity release market.
Nationwide director of mortgages, Henry Jordan, said: “More people are living longer and many older people have significant wealth tied up in their property, with the over 55s holding as much as £1.8trn in their property.
“Nationwide has a long-term plan to increase choices for borrowers in this age group, who have not been well catered for by mainstream mortgage lenders and remain underserved by standard mortgage products.
“The new Nationwide Lifetime Mortgage will enable those with equity in their home to access their capital and use those funds flexibly to meet a range of needs.”