Pure Retirement introduces interest servicing across Emerald lifetime mortgage range

Pure Retirement has expanded adviser choice with the launch of interest servicing across its Emerald lump sum and drawdown lifetime mortgages.

The introduction is designed to provide greater flexibility for over-55 clients who may not meet mainstream residential mortgage affordability criteria but still have some income available to make monthly payments.

The new option offers a discounted interest rate for customers making monthly payments of at least 25% of the monthly interest, helping them reduce the amount of interest added to their lifetime mortgage and lower the overall cost of borrowing. 

Customers have the flexibility to stop making monthly payments at any time, for example if their circumstances change, although the interest rate discount will cease. In addition, they can take payment holidays of up to three months in each year and make optional partial repayments of up to 12% each year of the amount borrowed without early repayment charges. Emerald also benefits from a seven-year fixed early repayment charge and no upfront initial loan fees.

The launch follows customer research which found that 92% of interest servicing customers said the ability to make repayments was either the main reason or an important factor when choosing their lifetime mortgage.

To support adviser conversations, Pure Retirement provides an online calculator which can help demonstrate the potential benefit of making monthly payments on the cost of borrowing over time.

Simon Hayton, managing director at Pure Retirement, said: “Mortgage advisers are likely to have clients for whom a mainstream residential mortgage is no longer available or suitable, who are unable to evidence a capital repayment strategy, or who expect their income to reduce before the end of the mortgage, for example at retirement.

If advisers are not considering interest servicing lifetime mortgages as part of the later life lending conversation, they may be missing an important option for clients who still have some income and a preference to make monthly payments. Interest Servicing on Emerald has been designed to support those conversations and provide greater flexibility for customers who may have fewer borrowing options.”