The Ipswich Building Society has bolstered its later life mortgage range with the launch of a five-year discount rate product at a maximum of 75% loan to value (LTV).
The Society’s specialist mortgage range for borrowers aged 50 and over was introduced earlier this year and offers availability up to a 40-year term with no maximum age limit.
The mutual believes the new longer-term product will help to support the demand for increased choice from older borrowers who have had limited options following the implementation of the Mortgage Market Review (MMR) in 2014 and changes to state pension and retirement laws.
In addition to the existing two-year options, borrowers can now choose a five-year discount rate offered at Standard Variable Rate (SVR), currently 5.74%, with a discount of 2.49% for 60 months from completion, giving a current pay rate of 3.25% (5.1% APRC*) for loans up to £500,000.
An application fee of £199, completion fee of £500, CHAPS fee of £35 and a valuation fee based on property valuation applies.
For remortgage applicants, there is a free valuation (up to property value of £1m) and fee assisted legals.
The society is offering fee free overpayments up to 50% of the original loan amount for three years following completion – following this, the remaining two years allow unlimited fee free overpayments. For the first three years following completion overpayments in excess of the 50% fee free allowance will be subject to an Early Repayment Charge (ERC) of 2%. For overpayments this charge is calculated on the overpayment amount that exceeds the 50% allowance, and for early redemption is calculated on the original loan amount.
For applicants seeking repayment on an interest only basis this is available on all existing later life deals up to 50% LTV providing there is a minimum of £150,000 equity in the property.
The new addition to the range is available to direct applicants across England and Wales, and through intermediaries based in the Society’s heartland area and members of selected networks and clubs.
Richard Norrington, Ipswich Building Society CEO, said: “Lending into retirement plays an essential role in supporting the changing dynamics of many households around the UK. We know that older borrowers have unique mortgage needs caused by changing sources of income and lifestyle, and since launching our range of later life mortgages earlier this year, we have received a great response from direct applicants and intermediaries.
“The new five-year mortgage is a longer-term option giving older borrowers increased choice and allows us to better support, for example, borrowers who may be seeking to secure their dream retirement property, which may require funds either set aside for renovations, or those who are not yet ready to undertake a sale and downsize property move.”