Stonehaven says Interest Select is the first product of its kind to offer home owners the option of paying some or all of the monthly interest rather than having to pay a set amount each month.
Stonehaven has calculated that a monthly payment of £30 over 25 years could reduce the amount owed on a £40,000 loan by £21,000.
The product has been developed from Stonehaven’s existing interest-only product and is available at rates starting from 6.08%. A series of roadshows will take place in the next three weeks to explain the product, the first being in Manchester on February 17.
Jayne Almond, chief executive of Stonehaven, says: “This deal reflects the needs of customers who want to take a more hands-on approach.”
Dean Mirfin, business development director at Key Retirement Solutions, says: “It will be interesting to see how much flexibility there is for customers as time goes by. If clients’ affordability changes, what happens?”