LV= has introduced a new lifetime mortgage product designed to reward customers who make regular interest payments. This innovative offering, part of their lifestyle lifetime mortgage range, provides borrowers with the opportunity to secure a discounted interest rate based on their payment commitments.
What is the New Interest Reward Mortgage Product?
The Lifestyle Interest Reward product allows customers to obtain a lump sum while benefiting from a reduced interest rate. Borrowers can choose to pay 25%, 50%, 75%, or 100% of the interest for fixed periods of five, ten, or fifteen years. The discount is determined by the level of commitment and the loan-to-value (LTV) ratio, remaining in effect as long as payments are consistently made.
Who Benefits from This Mortgage Product?
This product is particularly appealing to customers with a steady income who wish to maintain more of their estate for future beneficiaries. It also caters to residential interest-only borrowers seeking flexible lending solutions in later life. Additionally, the product includes access to services like Care Navigator and LV= Doctor Services, enhancing the overall value for clients.
What This Means for Borrowers and Advisers
With this launch, LV= strengthens its equity release offerings, complementing its existing Lifestyle Lump Sum and Drawdown products. Borrowers can enjoy greater flexibility and control over their finances, which is increasingly valued. Advisers now have an additional option to help clients access housing wealth without compromising on flexibility, particularly for those aiming to manage interest costs and protect their estate.
Frequently Asked Questions
How does the discount on interest rates work?
The discount is based on the percentage of interest the borrower commits to pay and the duration of that commitment, along with the loan-to-value ratio.
Can customers stop making payments?
Yes, customers can stop payments at any time; however, they will lose the discounted rate if they miss three payments within a 12-month period.