The equity release provider has been working with the Financial Conduct Authority to develop a range of products with the intention of launching in the first quarter of 2014. The details of the products are yet to be finalised.
Stonehaven managing director Georgina Smith said she hoped to bring more flexible products to the market: “In a mainstream mortgage you choose different fees. Some customers might not want a fixed rate for life. They might want a five-year fix.
“I am not saying we are going to launch one of these, but it is the way the market should go.”
Borrowers who took out a shorter-term fix were accepting a higher level of risk and therefore should get cheaper rates, she added.
She also urged the equity release sector to consider capital repayments: “About 25% of our customers do it to help their kids. Their kids are often the ones paying the interest.
The kids, who may be in their 40s, often say ‘Why can’t I repay some capital as well?’”
Repayment holidays and other choices over fees could be included too, she said.
Smith called on other lenders to work with the regulators in order to create new products: “Some ideas lenders have are too risky but the regulator has good intentions. Lenders need to work hard at that relationship.”
Her comments come after Sesame Bankhall’s chief urged industry bosses to create “radical” integrated retirement and mortgage products in order to beat the savings crisis.
Earlier this month, Hodge Lifetime released a lifetime mortgage which allowed capital repayments and could be repaid after five years.
Managing director Deian Jones said the current range of equity release products suited the asset rich and cash poor: “For those fortunate to be entering retirement with decent pension provision, the Retirement Mortgage offers a credible and flexible alternative to the more traditional equity release plan.”
