Lifetime mortgage provider Responsible Lending has released a lifetime mortgage fixed rate of 2.45% annual equivalent rate (AER).
The rate — equivalent to a 2.42% monthly equivalent rate (MER) or monthly interest rate — follows previous reductions made by Responsible Lending, to 2.78% AER (2.75% MER) in late April and 2.51% AER (2.48% MER) in mid-May.
This latest drop comes amid increasing rate competition among providers, driven by distress in equity markets, low central bank interest rates and the continued strengthening of the equity release market.
Responsible Lending’s lower rate is available both with and without drawdown, and available on a sliding scale of loan-to-value ratios (LTVs), dependent on age.
For example, a single customer aged 70 could access the rate with an LTV of up to 24%; for joint applications the LTV is up to 23%, but the rate moves up to 2.50% AER (2.47% MER).
The minimum loan amount is £10,000 and the product has fixed and defined early repayment charges (ERC).
Customers can also repay up to 10% of their loan each year without incurring an ERC.
The product is available through Responsible Life.
Keith Haggart, managing director of Responsible Lending, said: “Rates on lifetime mortgages have never been lower than this and they just keep getting better as funders flock to the long-term reliability of these investments.
“This trend is steering lifetime mortgage products into a virtuous circle as attractive rates boost consumer interest, which in turn continues to create downward pressure on the cost of borrowing.”