UK: New lifetime mortgage launched by Nationwide

Nationwide have become the first high street lender in the UK to offer a lifetime mortgage, with the new product to be sold through Age Solutions.

A lifetime mortgage is a long-term loan through which consumers borrow against the value of their home to access the capital they have locked away on their property. Lifetime mortgages differ from normal mortgages as the holder does not need to make any repayments during the life of the loan. Instead, when the customer either passes away or enters long-term care the initial amount along with the added interest will be repaid at once, most likely from the sale of the secured property.

The new product is available to both new and existing Nationwide customers aged between 55 to 84 and will have rates starting from 3.8%, with consumers able to borrow up to 46% of the value of their property.

Lifetime mortgage holders will be allowed to borrow additional money on their loan after the initial drawdown, assuming they meet lending criteria. They will also be allowed to make partial payments of up to 10% of the initial loan a year, although they will incur early repayment charges to do so. These early repayment charges will reduce over the first 15 years of the mortgage span.

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