Adelaide Bank said it aims to generate as much as 20 per cent of new residential mortgage lending from its new shared equity loan, a product finally the subject of a formal launch yesterday.The bank's chief general manager banking, Stephen Small, said he could see the new product, dubbed the Equity Finance Mortgage, accounting for 10 to 20 percent of new lending within two years. The bank's residential loan portfolio increased by $3.1 billion to $17.6 billion in the 2005/06 financial year. On that basis Adelaide may be budgeting to originate in the order of $500 million of these loans in 2008.Borrowers will be able to use the EFM loan to borrow up to 20 per cent of the value of the home for a term of 25 years. No repayments are made during the term and when the loan matures or is paid out the borrower must repay the principal plus 40 per cent of any capital gain on the property."It shifts the cost of home ownership from the early stage to later in the cycle," said Small.Adelaide Bank will sell the loan only in combination with a standard home loan. The bank's initial marketing will be directed at first home buyers who are looking for ways to make home ownership more affordable, but Small said he could see demand from home owners who wanted to trade up without taking on extra costs, and retirees looking for an equity release solution.Adelaide Bank developed the loan with the property fund manager Rismark International. Rismark is the product manufacturer and funder.Christopher Joye, managing director of Rismark, said his company had been working on the product since 2003 when the federal government convened a taskforce on home ownership. Joye was the architect of the report of the taskforce.Small said one of the strong features of the product was its equitable approach. While the lender takes a substantial share of any upside it will also bear some of the pain on the downside.If the value of the property falls during the life of the EFM loan the borrower pays back the principal less 20 per cent of capital loss.