Britain’s biggest building society will today launch a ‘lifetime mortgage’ to help homeowners who are struggling to pay off their interest-only deals.
Nationwide is the first major lender to offer an equity release plan, throwing a lifeline to thousands of customers unable to clear mortgage debts.
Around 1.9m borrowers have interest-only mortgages, which were sold widely in the 1990s as monthly repayments were much lower.
Nationwide is the first major lender to offer an equity release plan, throwing a lifeline to thousands of customers unable to clear mortgage debts
Investments were supposed to cover the outstanding amount after a typical 25-year term, but research shows 200,000 pensioners are now struggling to repay what they owe.
With banks reluctant to lend to older borrowers, many face having to sell their family home.
Nationwide’s deal will allow homeowners aged 55-84 to release cash from their home, and lets them stay put until they die.
Borrowers must also take independent legal advice.
Henry Jordan, of Nationwide, said: ‘There is huge, unmet demand from older homeowners finding it difficult to borrow money.
‘Our new lifetime mortgage will help them access money tied up in their property.’
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