Lifetime mortgage provider Spry Finance has launched the first product in the Irish market to combine key features of a traditional mortgage with the long-term security of a lifetime mortgage.

The Payment Reward Lifetime Mortgage allows homeowners aged over 55 to release equity from their property or refinance an existing mortgage without the need to sell their home or downsize.

It features an initial 'payment reward period' of committed monthly interest-only payments, after which the customer is not required to make regular payments.

However, the customer can choose to continue to make optional repayments, a key feature of all Spry Finance Lifetime Mortgages.

The mortgage is structured in two stages with the first being a period of between at least one and five years (up to a maximum of ten years) where committed interest-only repayments are made, during which time the borrower benefits from a discounted interest reward rate of 5.7 per cent.

Once all payments are made during the payment reward period, the second reward rate of 6.7 per cent will apply, and no further monthly repayments are required.  

Borrowers may still make optional repayments of up to ten per cent of the original loan amount annually, if they choose to.

Spry’s latest offering expands the company’s portfolio of later-life lending products to seven.

The company said: "It represents genuine innovation by giving customers greater choice and control at a time of life when many are juggling mortgage repayments, college expenses for adult children, and pension contributions."

Spry said the Payment Reward Lifetime Mortgage may be of particular interest to homeowners aged over 55 who are facing capital repayments at the end of an interest-only mortgage term – a challenge that is becoming increasingly prevalent in Ireland as mortgages in portfolios sold by Irish banks approach the end of their contracted term.

The company noted that the Irish population is getting older, with an average life expectancy of over 82, 15% of the population is over 65 and there will be 1 million over-60s by 2030. 

John Moriarty, CEO of Spry Finance, said: “As Ireland’s population ages and financial pressures evolve, the demand for flexible later-life financial solutions is growing.

"The Payment Reward Lifetime Mortgage responds directly to the needs of customers who want more choice to help manage their financial obligations without giving up the home they love or drawing heavily on their savings. 

“We believe this product represents a ground-breaking first in the Irish market.

"By combining key features of both a traditional and lifetime mortgage, it gives people a sustainable and flexible long-term solution at a critical life stage.

"Whether it is a homeowner with an interest-only mortgage and a capital payment due soon, or someone facing significant expenses as they plan for retirement, the Payment Reward Lifetime Mortgage gives people additional choice over their financial future.”

(Pic: Getty Images)