It believes advisers can boost business by highlighting protected equity guarantees and redemption fees which are becoming more important due to house price uncertainty and falling gilt yields.
The lender said the stagnant housing market means customers should look closely at protected equity guarantees which can adjust loan-to-value rates in line with their age if they withdraw more money and protect against falls in property values.
And the gilt yield low means equity release loans which link early redemption charges to gilts offer the very real prospect of remortgaging without penalties in the future.
Jon King, managing director of More 2 Life, said: “Innovation is driving expansion in the equity release market and product features such as the protected equity guarantee and redemption charges are increasingly important.
“Intermediaries have a real opportunity to demonstrate their expertise in a market which is set for strong growth and advice is crucial to ensuring customers receive the maximum benefit from products.
“The launch of the Equity Release Council last month has created a unified voice for the industry and the aim now must be to outline product benefits fully and to enhance products.”
More 2 Life’s protected equity guarantee is based on the percentage of the maximum withdrawal not taken – for instance a customer who is entitled to a £50,000 withdrawal who takes out £30,000 would have a 40% protected equity guarantee equivalent to £100,000 on a £250,000 property.
It adjusts the LTV in line with the customer’s age if they withdraw more money and protects against falls in property values of up to 5%.
Its early redemption charge is only payable if the FTSE UK 15 Year Gilts Index is lower than its benchmark yield when the loan is taken out - More 2 Life’s is currently 2.42% meaning customers would not pay a penalty.
Since launch in June 2010 sales of enhanced equity have climbed from zero to around 14% of the intermediated lump sum market and More 2 Life believes around one in four equity release customers could benefit from enhanced equity release.
Its equity release loans are available with rates of between 6.25% and 7.29% on minimum property values of £70,000 with a maximum loan of £500,000.
