More 2 Life is improving the loan to value rates on its Interest Choice Plan by up to 4%.

Maximum loan to values on the plan now start from 24% at age 60 compared with 20% previously and at 39% at age 75 compared with 36% previously with the maximum remaining at 45% at age 85-plus.

The equity release provider says it is seeing growing demand from customers who want to pay interest on equity release loans and retain the flexibility to convert to a standard lifetime mortgage or drawdown later; it does not charge any extra interest to convert.

Dave Harris, managing director at More 2 Life, said: “People need more flexible options for retirement income and the option of accessing property wealth as the cornerstone of retirement planning will continue to grow. Lifetime mortgages are ideally suited to those who are near or at retirement with repayment shortfalls and low retirement incomes and who wish to remain living in their property.

“The lifetime mortgage market is evolving rapidly and we anticipate increasingly competitive rates and customer product terms to emerge in the next year. The momentum will be supported by falling interest rates and the development of new product types.”