Ipswich Building Society has introduced a mortgage range for those borrowing into later life, comprising of discount and fixed rate deals, specially tailored to the needs of those aged 50 and upwards, with no maximum age restriction and up to a 40 year term. Loans are also available on an interest only basis up to 50% Loan To Value (LTV) providing there is a minimum of £150,000 equity in the property.
Since the implementation of the Mortgage Market Review (MMR) in 2014, borrowers in their mid-forties and above have had a reduced choice of mortgage products in the UK. This, coupled with updates to state pension and retirement laws, has significantly changed the borrowing patterns of the older population. With a demand for better choice, Ipswich Building Society has launched three new products to help increase options and accessibility for older borrowers.
The following products have been launched and will be available to direct customers across England and Wales and through selected intermediaries, for purchase and remortgage applicants:
– A 2 year discount rate at the Society’s Standard Variable Rate (currently 5.49%) minus 3.14%, giving a pay rate of 2.35% for two years from the completion date (5.2% APRC*), with a completion fee of £500. This product has no early repayment charge.
– A 2 year fixed rate at 2.75% until 30 September 2020 (5.1% APRC*), with a completion fee of £500. Fee free overpayments up to 50% of the original loan amount. An early repayment charge of 3% applies.
– A 5 year fixed rate at 3.50% until 30 September 2023 (4.8% APRC*), with a completion fee of £500. Fee free overpayments up to 50% of the original loan amount. An early repayment charge of 5% applies.
There is a maximum LTV of 75%, with minimum 5 year and maximum 40 year terms and no maximum age restriction. Borrowers must be aged at least 50 at the start of the loan, and for joint applications at least one applicant must meet this criteria. Loans are available from £25,000 to £500,000. Borrowers can choose to repay their mortgage via capital and repayment, interest only or part and part (for interest only the maximum LTV is 50% and applicants must have a minimum of £150,000 equity in their property). All products have an application fee of £199, CHAPS fee of £35 and a tiered valuation fee based on property value. For remortgage applicants the Society offers a free valuation for properties up to £1m, and fee assisted legals.
The Society’s discount rate product has no early repayment charge, with the fixed rate products offering a 50% fee free overpayment facility whereby borrowers can overpay penalty free by up to 50% of the original loan amount. For overpayments in excess of this amount, or early redemption, an Early Repayment Charge (ERC) applies. For overpayments this charge is calculated on the overpayment amount exceeding the 50% allowance, and for early redemption is calculated on the original loan amount.
Commenting on the launch, Richard Norrington, CEO at Ipswich Building Society said: “The introduction of our mortgage range for those borrowing into later life strengthens our commitment to providing diversity in the mortgage market. We have launched these products to assist with demand as we are aware that borrowers in later life have unique mortgage needs caused by changing sources of income and lifestyle.
“We have a wealth of experience in dealing with older customers, who contribute to a large percentage of our existing saving and borrowing members. We are pleased that through these tailored products we can offer further support to those aged 50 and over wishing to purchase a property or remortgage their existing home.
Our range also offers a new feature of no early repayment charge on the discount rate product, and, along with two fixed rate options, offers flexibility alongside peace of mind.”
The Society accepts 100% of pension income when assessing affordability and all applicants will benefit from its established manual underwriting process. Through this, the Society offers a more individual approach to those who may otherwise fall outside of the criteria of automated – often larger – lenders, and can take personal circumstances into account with each lending decision.