Nationwide Building Society has launched a lifetime mortgage, making it the only current high street lender to operate in this market.
The lender says the move is designed to help the UK’s changing and ageing population.
A Nationwide statement says: “Those over 55 have up to £1.8tn of property wealth and the launch of the Nationwide lifetime mortgage aims to help those looking to access those funds.”
The product does not require any repayments during the customer’s lifetime.
Interest is added to the sum borrowed, with a rate fixed for the term of the mortgage.
The rolled-up amount is repaid when the customer dies or enters long term care.
The mortgage is available to new customers and existing Nationwide members aged between 55 to 84.
Rate start from 3.80 per cent across four LTV tiers, up to 46 per cent LTV.
There are no product, valuation or advice fees.
Customers with the mortgage can borrow additional money, port the mortgage or make partial repayments of up to 10 per cent a year.
There are early repayment charges (ERCs) that are stepped and reduce over the first 15 years of the mortgage term.
The new product will be sold exclusively through Age Solutions, part of Age Partnership.
Nationwide director of mortgages Henry Jordan says: “Nationwide has a long-term plan to increase choices for borrowers in this age group, who have not been well catered for by mainstream mortgage lenders and remain underserved by standard mortgage products.”
Nationwide has also joined the Equity Release Council.
Coventry Building Society was the last high street lender to offer a lifetime mortgage, but stopped after the credit crunch.