Equity release lender More 2 Life has launched a lump sum lifetime mortgage product aimed at older customers looking to release equity from their homes.
More 2 Life’s new product, Prime Choice, is available for customers aged 55-84 years old, with a minimum property value of £100,000.
It is aimed at retired homeowners who are looking to borrow between £10,000 and £600,000.
Unlike a conventional mortgage, which runs for a fixed term, a lifetime mortgage is designed to run for the rest of an individual’s life.
During this period the property remains in their name and they are able to live there until they pass away or move into long-term care.
A lump sum lifetime mortgage means that the customer can take the money released as equity in one go rather that it being split into smaller amounts which are paid over time.
The product offers customers a flexible partial capital repayment option.
Other features include an early repayment charge exemption for individuals who are downsizing or whose partner has passed away or gone into long-term care and an uncapped guaranteed inheritance which allows customers to protect a percentage of their property’s value to use as inheritance.
Dave Harris, chief executive at More 2 Life, said: "As a greater number of retirees realise the benefits of unlocking their property wealth to boost their income, it is vital for lenders to continue creating innovative and flexible solutions to meet the shifting needs of a growing ageing population.
"Through Prime Choice, we’re able to provide older homeowners with the modern lending features they want and need in order to live the retirement they deserve, and also ensure they have the finances they need to fund their later lives comfortably."
Equity release is increasingly becoming more popular with more than £4bn of borrowing released in the last year.
Kay Ingram, director of public policy at LEBC, said funds were often used to supplement pension income, pay off other debts or release capital to help other family members.
However, she warned that equity release must be considered alongside other options such as a pension lump sum, extending an interest-only mortgage, or downsizing to a smaller property.
Ms Ingram said: "[Equity release] is best dealt with by a financial planner who is also a member of the Equity Release Council.
"The ERC sets standards for providers and advisers which include additional consumer safeguards such as a no negative equity guarantee, no hidden fees or penalties and referral to an independent solicitor prior to taking a lifetime mortgage."
She added: "More products have been developed with many offering the flexibility to pay back some capital and interest, transfer the loan to a new home when moving and to draw the loan in instalments as and when needed.
"Greater choice means independent advice, which tailors a solution to personal circumstances and plans and considers all other solutions, is essential to good consumer outcomes."