The average equity release rate has fallen to a record low while the number of options available to consumers has reached a new high, according to the latest figures from Moneyfacts.
The average rate across lifetime mortgages has dropped below 4% for the first time on Moneyfacts records, standing at 3.95% today. The average rate has fallen from 6.06% in February 2016, 5.20% in February 2019, and 4.49% in February 2020.
Additionally, product choice has expanded to an all-time high of 488 options, up from just 62 five years ago, 204 in 2019 and 405 in 2020.
Moneyfacts spokeswoman Rachel Springall said: “The equity release market has started this year awash with rate cuts and prospective borrowers looking to release wealth out of their home will find that the interest charged, on average, has now fallen to a record low.
“Indeed, the average lifetime mortgage rate has fallen below 4 per cent for the first time ever, showing that lenders are keen to meet demand, with some repricing their range multiple times over the past four weeks.
“Clearly, the impact of the coronavirus pandemic on the lives of consumers may have spurred some to seriously consider a lifetime mortgage, either to help fund their retirement or even to provide an early inheritance for their family members who may be struggling.”
