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LV= cuts rates on mortgages and equity release
Equity release specialist LV= has passed on savings from the falling cost of wholesale funding to customers by cutting the rates on its lifetime and flexible mortgages.
The interest rate on LV=’s lifetime mortgage for customers up to 80 years old has fallen to 6.39 per cent from 6.49 per cent AER, while the rate on its flexible lifetime mortgage has been cut to 6.49 per cent from 6.69 per cent AER for the same age group.
However, rates have also fallen by up to .20 percentage points for the 81 to 85 age group and those aged 86 to 95.
The announcement follows a 0.1 per cent rate cut in January across LV=’s range of equity release products.
Vanessa Owen, head of equity release for LV=, said: “We are cutting our equity release rates for the second time in as many months because the underlying cost of funding has fallen so we are able to pass this saving on to customers.”
Jock Cassidy, director of London-based Ashley Law, said: “These are competitive rates for equity release products, but it is difficult to get that message across to clients who compare them to the low base rate.
“There is not a huge market for equity release at the moment and a great deal of reticence in consumers’ minds because of the recession. Property prices are depressed so it is a buyer’s market and a disincentive for equity release.
“Equity release is the logical thing for people in these age groups who have cash-flow problems, but do not want to move away from their neighbourhood. Unfortunately it is the beneficiaries of the estate who tend to influence their parents.”
