Canada Life has reduced the rates on its equity release products, bringing the cost of the entire range below 5 per cent.
The lender announced it had cut the rates on its Lifestyle Options range with reductions of between 27 and 79 basis points.
The rate change means the annualised interest rate for the Lifestyle Lite product, the cheapest option, dropped to 3.12 per cent while the most expensive version, the Gold Plus, dropped from 5.59 per cent to 4.8 per cent.
Canada Life’s Lifestyle Options range allows customers to borrow up to £1m against their property and offers customers a tax-free, one-off initial cash advance, with interest on the loan rolled up and added to the mortgage balance each month.
The mid-range Lifestyle Gold was cut from 3.6 per cent to 3.43 per cent.
Other features include optional inheritance guarantee protection and all have a no negative equity guarantee.
Alice Watson, head of insurance marketing at Canada Life, said: “We’re pleased to announce a series of interest rate reductions on one of our lifetime mortgage product ranges.
“As with all our lifetime mortgage products, the Lifestyle Options range allows people to continue living in their homes, whilst releasing the money tied up in their property.
“This unlocked capital can boost retirement pots, pay for home improvements or even fund a holiday.”
Jane King, mortgage and equity release adviser at Ashridge Private Finance, said: “I am impressed with Canada Life’s rates.
“They are currently offering market leading rates with fixed early repayment charges, which many borrowers want as they feel more comfortable knowing the charges.
“They are also ERC free after eight years which is another plus. I shall continue to have them on my best buy list.”
Ms King said equity release was now a “massive market” but thought lenders would be looking for a unique selling point, rather than having the best rate, as flexibility, fee-free and fixed ERC options were often “more important” to borrowers.
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