Hodge Lifetime is offering a lifetime mortgage that allows customers to pay off up to 10 per cent of their initial loan each year without incurring early repayment charges.
The lump-sum lifetime mortgage launched this month. Consumers can repay up to 10 per cent of the original loan amount annually after the first year without paying ERCs.
Customers can also repay the loan in full without incurring ERCs after five years if they sell the property.
The product is priced at 6.5 per cent APR and the arrangement fee is £595. Minimum age for applicants is 60 and maximum is 85.
Hodge will lend between £20,000 and £500,000.
A customer with a £50,000 initial loan who repays 5 per cent of the initial loan each year will owe £58,689 after 10 years compared with £92,109 if they make no repayments.
Bower Retirement Services equity release planner Simon Chalk says: “Having a lifetime mortgage with the first-ever genuine overpayment facility offers great scope for clients who have previously been deterred from taking equity release by the effect of interest roll-up over time.”