Standard Life Bank will launch its first equity release mortgages next month.
The bank says its entry into the growing market follows a long period of preparation, taking into account the needs of its customers and in particular their need to know the risks of equity release.
Standard Life adds that, with its experience as a life insurer, it is well placed to help consumers understand the benefits of equity release as part of a long-term financial plan.
The 'Freestyle Home Cash Plan' product will be available to homeowners aged 60 or over as a rolled up interest loan whereby a lump sum is advanced to the customer based on their age and value of their property.
There will be no monthly payments and the loan will be repaid on the sale of the property – when the customer either dies or moves into long-term care. Interest will be fixed for the lifetime of the loan and customers will be allowed to make an early repayment, subject to a minimum limit.
Anne Gunther, chief executive of Standard Life Bank, says: “Our customers want to plan their financial future properly. Their home is an asset and our equity release mortgage has been designed to make this asset last a lifetime.”
Freestyle Home Cash Plan will only be available through independent financial advisers and applicants 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. Standard Life will also encourage customers to talk to the beneficiaries of their estates so that relatives are aware of the impact of equity release on their inheritance.
Other features include a no negative equity guarantee, the security of lifetime retention of property ownership and the option of further advances.