More 2 Life has adjusted its Capital Choice Plan product to allow bereaved borrowers to repay the loan within three years of the death of their partner without facing early repayment charges.
The lender last year cut the minimum age requirement of the Capital Choice Plan, a lump sum lifetime mortgage, to 55 in a bid to extend its appeal to more borrowers.
More 2 Life says that by removing ERCs in the event of a death, borrowers have more flexibility as they can sell the property and downsize without fear of added penalties.
It is the first time More 2 Life has offered this feature on any of its products.
The move follows research by the lender last year which found that almost two-thirds of advisers believe greater flexibility around early repayment options would boost the popularity of equity release among older homeowners.
More 2 Life chief executive officer Dave Harris says the lender is committed to working closely with intermediaries to design products that borrowers actually want, arguing that while 2017 saw record growth for the equity release market further innovation is required.
He adds: “All the signs are pointing towards equity release becoming a more mainstream approach of accessing cash during retirement. Therefore, it is imperative that older borrowers have a greater range of options available to choose from, which will provide them with the flexibility they require.”