OneFamily unveils lifetime loans where borrowers choose interest rate

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OneFamily has launched two lifetime mortgages that let borrowers choose how much interest they want to pay, and for how long.

Borrowers can also pick between fixed or variable rate loans.

OneFamily says its lifetime mortgages can be taken out by parents or grandparents wanting to raise money for deposits on houses for children and grandchildren.

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OneFamily managing director Georgina Smith says: “Our new products mean consumers can repay up to 100 per cent of the interest on the loan at either a variable or fixed interest rate, in the same way you would with a mainstream interest only mortgage.

“Obviously with variable interest rates there is the risk that the monthly payments may change in the future.

“However, OneFamily has considered this and gives consumers the option to fix their maximum monthly interest payment, even if they have a variable interest rate.”

If consumers want to fix their monthly interest rate, and then interest rates increase above the agreed figure, extra interest is added to the loan and will be paid back at the end of the term.

Smith adds: “We have included the option to make payments at a set percentage of the interest due or a set amount, and consumers can also choose to stop making the payments if their circumstances change.

“At this point they will have the choice to switch to one of our other lifetime mortgages, such as our interest roll-up or voluntary payment products.”

These will also be the first lifetime mortgage products to be added to the approved lenders list of the Mortgage Intelligence network.

Mortgage Intelligence managing director Sally Laker says: “By adding OneFamily’s new lifetime mortgages to our panel, we are keeping our advisers ahead of the curve and providing them with the best products for their clients.”

OneFamily chief executive Simon Markey says: “Our new products will enable the whole family to come together to decide how best to manage their lifetime mortgage, including how the interest payments will be met.”