The launch, which is subject to regulatory approval, aims to provide a flexible lifetime mortgage solution.
Customers and their families will be able to pay some or all of the interest each month. Products will also offer variable interest rate pricing, linked to the Consumer Price Index, alongside the traditional fixed rate options, which OneFamily says is a first in the lifetime mortgages sector.
It will also offer simple fixed term Early Repayment Charges, a down-sizing guarantee and the option to stop paying interest and to switch to one of OneFamily’s other products.
The products will only be available via intermediaries and will be underpinned by The Equity Release Council safeguards.
Georgina Smith, former CEO and Sales and Marketing Director at Stonehaven, has been appointed as the MD of OneFamily Lifetime Mortgages, which will operate as a separate business unit.
Simon Markey, CEO of OneFamily, said:
“Families are turning to each other more and more to plan for and manage life’s milestone moments. We understand the aspirations of families alongside the financial pressures they face; whether that’s helping children get on the property ladder or trying to fund a secure retirement.
“The lifetime mortgage market is growing rapidly, as more homeowners over the age of 55 make use of their housing wealth to support their finances in later life. In the final quarter of 2015 there was a record amount of housing wealth unlocked via drawdown lifetime mortgages, pushing annual equity release lending to a new high of £1.61 billion.
“Lifetime mortgages are a natural extension for OneFamily. These new products will allow an intermediary’s clients and their families to make the best use of their most valuable asset, their home.”
Georgina Smith, Managing Director at OneFamily Lifetime Mortgages, added:
“Our unique proposition recognises that many people approaching retirement with interest-only mortgages will be coming to the end of that product, still in debt, yet unable to re-mortgage to pay that down. Our products will solve that problem ensuring that people can stay in the homes that they love with manageable finance they are able to afford.
“OneFamily Lifetime Mortgages would give homeowners the chance to help their families to get on the housing ladder and with the Department of Work and Pensions calculating that 11 million of us are facing inadequate retirement incomes, these products could also provide funds to address this pension funding gap.”
Andrea Rozario, Chief Corporate Officer at Bower Retirement Services, commented:
“The announcement of OneFamily’s intention to join the lifetime mortgage market is a welcome addition to a growing market.
“I’m sure the whole industry will be interested to see exactly what the family- focused products and the underwriting will look like. Lower interest rates, flexibility and increased choice are all great news for customers and there is a particular need for solutions for people facing the end of an interest-only mortgage as equity release can offer a lifeline to some in this predicament.
“Over recent years we have seen several providers produce increasingly competitive and flexible products and this trend is likely to continue."
