OneFamily has announced its intention to enter the lifetime mortgage market during the first half of 2016 with a “unique product offering” available exclusively through advisers.
The launch, subject to regulatory approval, is aimed at making the mutual one of the most flexible equity release providers in the market.
The new products will allow customers and their families to pay some or all of the interest each month, in order to avoid any negative impact of rolled-up interest.
They will also offer variable interest rate pricing linked to the Consumer Price Index, alongside fixed-rate options, fixed-term early repayment charges, a downsizing guarantee and the option to stop paying interest and to switch to one of OneFamily’s other products.
Chief executive Simon Markey commented: “The lifetime mortgage market is growing rapidly, as more homeowners over the age of 55 make use of their housing wealth to support their finances in later life.”
Georgina Smith, former marketing director at Stonehaven, has been appointed managing director of OneFamily Lifetime Mortgages, which will operate as a separate business unit.
Ms Smith said: “Our unique proposition recognises that many people approaching retirement with interest-only mortgages will be coming to the end of that product, still in debt, yet unable to re-mortgage to pay that down.”
The company added that all its new plans will be underpinned by The Equity Release Council safeguards and based on the highest ethical standards, as befits a mutual organisation.
Alice Watson, product manager at Retirement Advantage Equity Release, said new entrants to the market are proof of the progress made in recent years.
“Ultimately, it is consumers who benefit from new entrants to the market, as it drives innovation and leads to new solutions which provide the flexibility and features to cater for an increasingly diverse range of customers.”
Andrea Rozario, chief corporate officer at Bower Retirement Services, said: “Over recent years we have seen several providers produce increasingly competitive and flexible products and this trend is likely to continue. For some customers an ability to protect an element of equity to pass on to family in later years is important, while for others, releasing property wealth enables them to help their family members immediately.”
peter.walker@ft.com
