Pure Retirement has boosted its later life offering by launching an interest servicing option across its Heritage lifetime mortgage range.

The move will see the specialist lender offer interest rate discounts ranging from 30 basis points to 1% for customers making monthly payments from between 25% to 100% of the monthly interest.

The firm says: “An interest-serviced lifetime mortgage rewards customers with an interest rate discount while they make monthly payments on their lifetime mortgage.

“Customers can choose to stop making the monthly payments at any time, or if they just need a break from making payments, they can benefit from a payment holiday of up to three months each year.”

The interest servicing option is available on both lump sum and drawdown lifetime mortgages, with the ability to also service interest and receive a discount on drawdowns and further advances.

The lender says interest servicing on this product is “designed to meet the needs of a growing number of lifetime mortgage customers who have some income and wish to use it to reduce the cost of borrowing and preserve more equity for their estate.

“These customers may want to pay for a period of time — for example until retirement — or simply for as long as they can, with the reassurance that should they need to, they can stop making payments at any time.”

Pure Retirement head of product Chris Buchanan adds: “The lifetime mortgage market is evolving to meet more diverse customer needs and circumstances.

“Our ambition was to develop a leading interest servicing lifetime mortgage, with interest rate discounts delivering meaningful customer savings, but at the same time keeping it simple for advisers and customers, with no complex payment term commitments to navigate.

“We’re also helping customers retain the discount for longer with up to three months’ payment holiday every year.”