It’s new approach will be to charge borrowers Early Repayment Charges (ERCs) of 5% in years one to five, 3% in years six to 10, and 0% from year 11 onwards. The 10% ERC–free partial repayment option remains available.
Previously ERCs were calculated based on the gilt rate which the lender said was more difficult for customers to understand.
Dean Mirfin (pictured), technical director at intermediary Key Retirement, said the move was good for the market.
He said: “For those who require the flexibility to repay, lifetime mortgages with fixed ERCs are an essential feature in today’s equity release lending landscape. The addition of fixed ERCs from More 2 Life adds greater scope and competition in the fixed space which is further good news for consumers.”
Explaining the rationale behind the change, Dave Harris, managing director at more 2 life, said: “With the equity release market growing steadily, it is important that lenders drive innovation in the sector to allow a greater number of borrowers to access the wealth currently tied up in their homes.”
He added: “Property wealth is likely to account for a significant proportion of a client’s overall wealth, so it’s crucial that retirees have a greater range of options available to them. At More 2 Life we will continue to bring innovative products to the market to suit individual retirement needs and offer competitive deals for our intermediaries.”
The announcement comes on the back of industry figures released earlier this week showing that the equity release market has, for the first time, surpassed total annual lending of £2bn. Data from the Equity Release Council showed that total lending for 2016 was £2.15bn, an increase of 34% on the previous year.