Pure Retirement is introducing personalised interest rates based on each equity release borrowers’ postcode, property type, age and loan amount.

The lender is bringing in the new pricing model for its Classic lifetime mortgage range.

Its Heritage and Sovereign product ranges will continue to offer rates based on age and LTV alone.

The lender says its new pricing model is a “customer-centric initiative” that will simplify the process for brokers and bring down costs for borrowers.

The Classic range will have four different product variants, including lump sum; drawdown; fee-free and £500 fee options.

Its new pricing methodology will be integrated with the major equity release sourcing platforms Advise Wise, Iress and Air so that brokers can still compare different product pricing for their clients in the usual way.

All Key Facts Illustrations (KFIs) generated under the new approach will be valid for 21 days, protecting customers from any rate increases after receiving a quote.

Borrowers who are within 50 days of their next birthday will be treated as though they have already reached that age from a pricing perspective, meaning they may be able to secure a lower rate.

But Access Equity Release and Your Mortgage Decisions director Dominik Lipnicki believes the move is more “funder-centric” than “consumer-centric”.

He says: “It’s not a new thing as Aviva already uses this type of pricing on some products, but I think it would be negative for the market if other lenders started to take this approach.

“It’s all very well if you are in the right postcode and the right segment of customer to benefit from the best rates, but if all funders start chasing the same type of cases it is likely to be detrimental to customers who fall outside of those parameters.”

Yet Pure Retirement head of product Brendan Gilligan argues it is a positive step for borrowers

He says: “In a world where people are likely to be more cautious about making major financial decisions, we want to offer them a retirement solution that they know will be tailored to their bespoke needs and circumstances.

“Moving to a flexible pricing solution allows for better and more competitive rates for customers, and we’re delighted to be able to do so in a way that will be frictionless for brokers to utilise.”