The monthly interest rate on an Interest Select Lite loan will be cut from 5.94% to 5.46%, Interest Select from 6.03% to 5.56%; Interest Select Plus from 6.08% to 5.60% and Interest Select Max from 6.78% to 6.30%.
The Interest Select Lifetime Mortgages allows borrowers to pay some or all of the interest charged each month and which enables the client to potentially eliminate the impact of interest roll-up.
The move will mean that for a typical client, paying 100% of the interest and borrowing £50,000 on Interest Select Lite, the interest payable would be £230 per month, reduced from £251 per month. This would lead to a saving of £243 per year compared to the current rate, or £4,862 over an expected 20 year term.
Tom Evans, Managing Director, Stonehaven said:
“Stonehaven has secured a substantial tranche of new funding for this product, but being so attractive it will have a definitve life span. This unprecedented cut will cement our number one position in this market. As we enter 2015, this move signals our clear intentions for the year ahead to support advisers who are looking for flexible and market-leading products for their clients.
“This reduction shows Stonehaven’s commitment to clients who want to make regular interest payments on their mortgage. The Interest Select range offers a potential solution for homeowners who are carrying residual mortgage debt into retirement and no longer have a suitable repayment vehicle in place. A growing number of homeowners are facing restricted lending criteria from the mainstream lenders and are unable to clear the hurdles imposed by the MMR rules brought in last year. By having the opportunity to pay some, or all, of the interest each month, the lifetime mortgage operates in a similar way to that of a mainstream mortgage where borrowers can maintain control of their loan and maintain peace of mind.”
