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LV= announces new Equity Release product

Press release: 12/01/2016

12 January | Press release

Retirement Mortgage specialist LV= today announces the launch of a new product, Lifetime Mortgage LumpSum+, marking its ongoing commitment to the growing Equity Release market in the UK.

LumpSum+ provides additional flexibility to customers, increasing the Loan to Value (LTV) ratio by 5 per cent at each age bracket, and will be launched at competitive interest rates, between 5.3% and 5.6% according to the initial level of borrowing1.

LV’s existing Lump Sum product will be closed to new business, although current customers will still be able to apply for additional borrowing. The company will also contact all advisers with a current quote or application to offer them the opportunity to switch to LumpSum+

Historically Equity Release products have been funded from LV=’s enhanced annuities but this business continues to contract following the pensions freedoms. To satisfy the rising demand for Equity Release, the company has sourced external funding, enabling it to offer better rates to more people.

Vanessa Owen, Head of Retirement Solutions Products at LV=, said: “Equity release has long been viewed as a solution to support the shortfall in pensions savings, and it’s been a growth area for LV= over the past five years. Our new funding agreement has allowed us to extend our product range to reach more customers looking to release equity.

“Under the right circumstances, releasing money tied up in a home can provide additional and crucial support in retirement, especially for those who have smaller pension pots, but have enjoyed large gains on their property value. We’re committed to making sure our customers have quality products available to help them, so they can maintain their desired standard of living.”

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[1] For example a customer aged 70 borrowing 25% of their property value would be offered a rate of 5.3% compared to a rate of 5.6% if they wanted to borrow 35% (maximum loan to value for age 70).