Standard Life Bank has launched its equity release mortgage, Freestyle Home Cash Plan.
With a current fixed rate of 6.9%, the bank's entrance to this growing market follows a long period of careful preparation, taking into account the needs of its customers and in particular the need for them to know the risks of equity release.
Making use of SLB's experience as a life insurer, the bank says it is is well placed to help consumers understand the benefits of equity release as part of a long-term financial plan.
Anne Gunther, chief executive of SLB, says: “The bank's customers want to understand the risks of equity release and they want to properly plan their financial future.
“Their home is an asset and the company believes our equity release mortgage has been designed to make this asset last a lifetime. There has deliberate effort not to design the product to be used to maximise short-term gain to the detriment of long-term financial security.
SLB says it has paid careful attention to how this mortgage is sold. Freestyle Home Cash Plan will only be available through an independent financial adviser. Those applying will be asked if it is more appropriate that they sell their house and move to a smaller property before deciding to go for equity release.
The bank will also encourage customers to talk to the beneficiaries of their estate so that relatives are aware of the impact of equity release on their inheritance. Other features whichwill protect customers are the 'no negative equity' guarantee, the lifetime security of retention of property ownership and the option of further advances.