One Family changes interest roll-up mortgage

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One Family changes interest roll-up mortgage

One Family has changed its Interest Roll Up Lifetime mortgage so customers can roll the interest up and pay nothing or pay it off as and when they like.

All new customers will now be able to manage the growth of interest on their loan through individual payments of up to 10 per cent of the original loan amount, or through regular payments.

Nici Audhlam-Gardiner, managing director of lifetime mortgages at One Family, said: "By giving our customers the option to pay off the interest on their loan we are giving them increased flexibility.

"We know that our customers' financial circumstances change, and we want our products to be able to flex with their needs.

"For example, we have seen cases where customers have been left an inheritance by a friend or older family member, and they want to be able to make a payment on their loan. This new approach helps with this situation

"All new One Family customers now have the option to pay off interest at any time on their lifetime mortgage. One benefit of this is maximising the amount of equity left in their property for an inheritance."

More than half - 54 per cent - of the lifetime mortgages taken with One Family are already used by homeowners who pay off interest.

Of these existing customers, more than a third - 38 per cent - pay off both some of the capital and interest each year and one in five choose to pay off up to 100 per cent of the interest.

One Family's lifetime mortgage range is available on either a fixed, two year fixed or variable rate basis.

Dean Mirfin, chief product officer at Key Retirement, said: "One Family are following the trend set by a number of lenders who increasingly are aware that borrowers want greater flexibility over how and when they repay their loans, and importantly the flexibility to change their thinking as their circustances change.

"These options provide greater choice for those borrowers who maybe either cant commit, or do not want to commit to regular payments and who are therefore better suited to roll-up, but who know they can either afford to make ad hoc payments or want the flexibility to do so should things in the future change."