April Mortgages has launched Interest Only+ for over 50s, a major enhancement to its Interest Only proposition designed to give advisors more ways to support clients both before and throughout retirement.
At the heart of the new proposition is a significant expansion of April’s approach to over 50s, with a £24,000 minimum application income, no minimum equity requirement and no maximum age at the end of the mortgage term for sole applicants.
Interest Only and Part & Part affordability will also now be assessed on an Interest Only and Part & Part basis respectively, rather than on a capital repayment basis.
The changes are designed to make Interest Only accessible to a broader range of borrowers and give advisors another mainstream mortgage option to explore for clients who might otherwise need to consider specialist later-life products such as Retirement Interest Only (RIO) or Equity Release.
Interest Only+ is available with April's 5, 10 and 15-year fixed rates, giving clients the option of longer-term payment certainty. This can be particularly valuable for those aged 50 and over planning around changes to income, pensions and other financial priorities.
Interest Only+ includes the flexibility built into April mortgages, including unlimited overpayments, automatic rate reductions as loan-to-value improves, and no early repayment charges when moving home or repaying from the client's own funds.
For clients aged 50+, Interest Only+ accepts a broad range of retirement income, including State Pension, private and workplace pensions and Pension Credit. April can also consider 4% of the pension pot as annual income.
For sole applicants, there is no maximum age at the end of the mortgage term, providing greater flexibility for older borrowers who can demonstrate that the mortgage remains affordable.
This could give advisors another option for clients looking to remortgage, raise capital, support family members or manage their finances through retirement without automatically moving into specialist later-life lending.
Across Interest Only+, affordability is now assessed based on how the client will actually repay their mortgage: Interest Only assessed as Interest Only, and Part & Part assessed as Part & Part.
Commenting on the launch, James Pagan, Director of Product, Portfolio & Operations at April Mortgages, said:
“Being over 50 doesn't mean borrowing needs disappear. Yet for many older borrowers, the range of mainstream mortgage options can narrow significantly as they approach or enter retirement.
“With Interest Only+, we want to give advisors another option to consider. A £24,000 minimum income for over 50s, broader acceptance of pension income and no maximum age at the end of term for sole applicants mean we can look at cases that may previously have needed to move towards specialist later-life lending.
“We've combined that with 5, 10 and 15-year fixed rates and the flexibility that comes as standard with an April mortgage. It's a modern approach to Interest Only lending that gives advisors more ways to help their clients.”
