The interest rate will increase from 7.15% to 7.35% for business introduced through IFAs and from 7.29% to 7.49% for business that comes direct to Norwich Union.
The Flexible Cash Release Plan is a mortgage-based equity release product.
Paul Stokes, head of equity release marketing at Norwich Union, said:
"Equity release plans provide a solution for many elderly people who have no other way of generating a cash lump sum and want to stay in their own home. The product is in essence a lifetime fixed-rate mortgage. As long-term interest rates are moving upwards (and therefore the costs to Norwich Union of raising funds through the money markets), so is the cost to consumers.
"This increased cost has been absorbed by Norwich Union in recent weeks but we now unfortunately have to pass on the increase in rates to new borrowers."
