The interest rate of 6.17% monthly is fixed for life and interest payments are subject to a £25 minimum.
Loan to values start from 20% at age 60 rising to 36% at age 75 and the maximum is 45% at age 85-plus.
Clients do not have to choose a term to pay the interest and can stop free of charge at any time. On further withdrawals rates are fixed on the rate applicable then.
Jon King, managing director of More 2 Life, said equity release is changing as retirement changes and customers are demanding increased flexibility in response.
He said: “Many customers want to pay interest in order to protect the equity in their home while others need to cut debts such as interest-only mortgages and others simply want the flexibility as they are still working.
“The Interest Choice Plan helps expand the market by improving on previous plans which offered interest-paying options and offering increased flexibility on access to further funds.”
Just Retirement has provided funding for the plan, which is available from November 1st.
Keith Haggart, director at specialist equity release provider Just Retirement, said: “We are pleased to be supporting More 2 Life bring further innovation to the equity release market and to provide people with improved choice and greater flexibility”