The product will offer the highest LTV available in the equity release marketplace and features a sliding scale for early repayment charges (ERCs) for the first eight years of the loan, after which no ERCs will apply.
Speaking to Mortgage Solutions, Nici Audhlam-Gardiner, managing director of OneFamily Lifetime Mortgages, said: “The LTV of 58 per cent is about four per cent higher than what you usually see out there.
“We’ve received positive feedback from mortgage brokers who say they welcome the extra flexibility offered by this product.
“Customers who are interested in this product tend to fall into two categories. The first group are those who want to release equity to manage their retirements or pay off debts, and they find that the standard LTVs don’t go high enough for what they need.
“The second group are over-65s who want to help their children or grandchildren buy a property. This group might be particularly keen on our new product.
OneFamily has joined forces with a “prestigious American investor” to bring the product to market.
Asked about the identity of the investor, Audhlam-Gardiner said: “They prefer to remain anonymous but I can say they are a different type of player in this market and they have a different way of looking at capital structures.
“Attracting a prestigious US investor also demonstrates the growing attraction of the equity release market.”
Understand loan cost
ERCs for years one to three are charged at six per cent, year four at five per cent, year five at four per cent, year six at three per cent, year seven at two per cent and year eight at one per cent.
The fixed percentages make it easy for homeowners to understand the cost of closing the loan early.
Borrowers will be able to borrow up to £1m and make voluntary repayments of up to 10 per cent of the initial loan amount each year. They will have direct access to OneFamily’s team of underwriters.
The lifetime mortgage market is expected to surpass £5bn in 2019 and, as it continues to grow, lenders are looking for ways to meet the changing needs of homeowners seeking equity release.
The lender added that its lifetime mortgage will help advisers meet the needs of customers who want to access a larger amount of capital for their own retirement needs or provide support to the next generation of their family.