The cut means monthly interest rates on the plan have fallen by 0.49% since the start of 2013 with the last reduction going through in mid-January.
Jon King, managing director of more 2 life, said: “Customers taking out equity release focus on how much they can withdraw and how much they can leave as an inheritance. The Protected Equity Plan gives them the flexibility to do both.
“Ongoing low long-term interest rates mean we can deliver further benefits to customers and the second rate cut on the Protected Plan reflects that.”
Continued house price uncertainty is boosting sales of the Protected Equity Plan which allows customers aged 70 and above to guarantee a percentage of the value of their home when they take out the plan and retain flexibility over withdrawing further funds if needed.
A 70-year-old customer taking half of the maximum amount they are entitled to can protect 50% of the value of their house. On a £200,000 house they would be entitled to a maximum £60,000 but if they take £30,000 they can guarantee 50% of the house for an inheritance.
The rate cut on the Protected Equity Plan follows a rate reductions on its Enhanced Equity Release Plan twice in just over a month to the current 6.6%.