The Melton has launched a new home loan for older borrowers with an interest-only mortgage.
The mortgage allows customers, who are 55-years-old and over, to remortgage on a part and part basis up to 75 per cent loan-to-value (LTV).
This is with a maximum 50 per cent LTV interest-only element.
The product will allow borrowers to have repayment strategy options at the end of the term, including switching to a lifetime mortgage.
Nicola Alvarez, director of sales and marketing for the Melton Building Society, said: "Customers with interest-only mortgages face having to sell their homes if they can’t repay their mortgage at the end of the term.
"There is currently a gap between standard mortgage offerings and equity release mortgages. This new product provides an affordable, sustainable solution for older borrowers to reduce their interest only balances."
The Melton considers lending up to a maximum age of 80 at the end of the mortgage term subject to affordability assessment. The minimum equity requirement for this product is £100,000.
Julie Lord, chief executive and chartered financial planner at Bridgend-based Magenta Financial Planning, said: "It’s great that there are more mortgage products available for older borrowers because it provides them with added flexibility.
"Often, older borrowers live in lovely big houses so having the flexibility to release money and enjoy it,is a good thing, especially when they are under 80-years-old and can get around.
"My only concern is that what happens when they get to 80. Will they pull the rug from under the client’s feet and have they thoroughly looked at how the clients is going to repay the amount? Such offerings must be a part of a thoroughly thought out plan."
