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Now RBS enters equity release with 6.79% interest roll-up deal

Royal Bank of Scotland is the second high-street name to enter the equity-release mar- ket with a lifetime mortgage product aimed at existing customers.

The move follows HSBC’s entry into the market. RBS and subsidiary Natwest will be writing to all existing customers over the age of 60 offering an interest roll-up lifetime mortgage at 6.79 per cent.

There is an application fee of 599 and the product has a no negative equity guarantee and a protected equity option.

The amount that a customer can borrow is on a sliding scale, running from 17 per cent of the property value at age 60 to 50 per cent at age 89 and over. The loan is available as a cash lump sum, monthly payments or a mixture of both.

An RBS spokesman says: “Our lifetime mortgage meets a demand among a small number of our existing customers who want to release some of the value in their residential property to finance their retirement plans. We are in the process of submitting our application for Ship membership. We have no immediate plans to launch the product to intermediaries.”

Ship mortgage product board chairman Simon Little says: “Other high-street lenders are probably waiting to see the results of the FSA’s mystery shopping exercise before entering the market.”

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