Equity release lender More 2 Life has introduced a drawdown option to its Capital Choice Plan.
The drawdown option will allow customers to take out a minimum amount of £2,000 and a maximum drawdown amount of double their initial loan amount.
The feature will be available to homeowners aged 55 and over and has been introduced with the aim of providing greater flexibility for borrowers to access their property wealth.
Capital Choice said it was suitable for clients looking for a higher lump sum, drawing down part of their loan as and when they need it, rather than taking the entire sum immediately and paying interest on this.
More 2 Life said it has worked with advisers on the development of the plan.
As a result of their feedback, Capital Choice will offer fixed early repayment charges (ERCs) in addition to the plan’s 10 per cent ERC in order to provide transparency around the charges borrowers could incur.
Dave Harris, CEO at More 2 Life, said: "At More 2 Life, we are continually striving to make sure that we’re offering clients a range of products that include both useful and practical features.
"As such, it is great to be able to announce this new feature on our Capital Choice Plan as we continue to work closely with our intermediaries to develop products that they and their clients want.
"By offering a new drawdown feature, we aim to provide older homeowners with the flexibility they want and need."
He added: "The equity release market has experienced record-breaking levels of growth recently, but it’s vital that we continue to drive innovation in the sector.
"Innovative products with an increasing number of options will help more retirees’ access the wealth tied up in their homes and more 2 life intends to be at the forefront of these exciting market developments."
Alan Chan, director and financial planner at IFS Wealth and Pensions, said: "It’s good to have this flexibility, it can be suitable for clients with a very specific need.
"We do have an ageing population and some individuals are property rich and cash poor. These individuals may want to look at this kind of product and use the equity in their property to top up their retirement income."
In June this year rival provider Just teamed up with Saga to offer a regular drawdown lifetime mortgage.
This solution combines an initial lump sum payment with ongoing monthly payments, which are all tax-free.