Equity release provider Retirement Advantage has reached a long-term funding agreement with defined benefit specialist insurer Pension Insurance Corporation.
The deal will allow the firm to launch two new equity release products, which it has called its "Lifestyle Gold" and "Lifestyle Platinum" products.
Available to consumers aged between 60 and 90, both products will have fixed early repayment charges.
The Lifestyle Platinum option offers a loan-to-value ratio of up to 46 per cent for those aged 74, while the Lifestyle Gold product offers "competitive" interest rates.
Tom Evans, managing director of Retirement Advantage Equity Release, said the announcement came at a time when equity release was "undergoing a period of growth unparalleled by other types of mortgage finance".
"Equity release is becoming increasingly attractive to a broader range of consumers. As the market continues to grow, we have listened to what advisers and customers say they need, and have responded accordingly with the Lifestyle Options range.
He said the products were designed for people who wanted "greater simplicity and certainty", adding that they created "peace of mind to those who want a cash lump sum but do not want to make any interest payments".
“The straightforward nature of these products will enable customers to gain a clearer sense of how they will plan their retirement finances with their advisers, whether they seek to make home improvements, take a holiday abroad or consolidate existing debt," he said.
The launch of the products coincided with the new tax year, during which many expect a major surge in demand for equity release products.
That's because this year will see the first big wave of the interest-only home loans from the 1990s reaching maturity.
The Financial Conduct Authority has estimated that almost half of those with interest-only mortgages will not be able to repay their loan in full, and that 50 per cent of those would have a shortfall of more than £50,000.
While many advisers continue to regard equity release as a last resort, commentators have warned it may prove to be the only option for some people.
Jon Greer, pension expert at Old Mutual Wealth, recently told FTAdviser: "There are a lot of people who seem to be thinking, 'I'm going to rely on downsizing to fund my retirement.' But what we're actually seeing is that [downsizing] is not going to be a silver bullet."
He said problems with availability of suitable housing in the right area meant downsizing often failed to produce the capital many retirees were expecting.
"Equity release will become more mainstream going forward," he said, adding many people would simply not have an alternative.
james.fernyhough@ft.com
