The criteria change is only available to new customers.
The lender said half of the lifetime mortgages taken with OneFamily were already used by homeowners who pay off interest. Of these existing customers, over a third pay off both some of the capital and interest up to a maximum of 10% of the original loan value each year and 16% choose to pay off up to 100% of the interest.
The lender said this demonstrates that the majority of customers would prefer to have the option to pay off interest.
Nici Audhlam-Gardiner, managing director of Lifetime Mortgages, said: “By giving our customers the option to pay off the interest on their loan we are giving them increased flexibility.
“We know that our customers’ financial circumstances change, and we want our products to be able to flex with their needs. For example, we’ve seen cases where customers have been left an inheritance by a friend or older family member, and they want to be able to make a payment on their loan. This new approach helps with this situation.”
OneFamily’s lifetime mortgage range is available on either a fixed, two year fixed or variable rate basis.
In September the lender appointed Denise Saber as lending consultant to broaden its range of funders and raise the profile of equity release as a sector among investment managers for retail and institutional pension funds.