The equity release lender also claims borrowers will be given the ability to service interest payments monthly rather than rolling it up with the capital, within the same timeframe.
Jon King, managing director of More 2 Life, says the equity release sector has to embrace change and develop products that are better suited to people’s needs.
He said: “Prosperity in the future of equity release depends on innovation. The growth of this market over the past few years has been driven by innovation and we do need more.
“The market is currently restricted by a lack of funding but I’d expect to see products like this in the next year to two years.”
He sees shorter term equity release of around five years as a future product, allowing retired borrowers the chance to release a lump of cash for a short time and then repay when they downsize.
At the moment early repayment charges on equity release loans mean providers can lack flexibility to innovate. But King believes retired borrowers releasing equity from their homes should be given the opportunity to choose to service the interest payments.
He said: “Some people have a monthly income and want to keep up payments. Some people are also still working beyond the retirement age and will want that option.”
More 2 Life has grown its own share of the equity release market to 9% this year, driven by increasing popularity of impaired equity release which offers clients who smoke or suffer illness access to loans.
King added: “The impaired product is an example of how the market has already innovated and it’s grown from nothing in 2010 to 14% of the total market this year.
“This growth has been delivered by intermediaries who have won the battle on advice in the equity release sector.”
