The rate cut takes effect from 16 July for both drawdown and lump sum business with Loan to Values (LTV) starting at 30% at age 70 and rising to 50% at age 90.

More 2 Life’s protected equity guarantee adjusts the LTV in line with the customer’s age if they withdraw more money and also protects against falls in property values of up to 5%.

The lender has built a 14% market share of lump sum business through advisers in the three months to 31 March, which it said was down to higher LTV deals available through enhanced equity release.

Jon King, managing director of More 2 Life, said: “The advantages of protected equity guarantees is a major driver for standard equity release products and we’ve cut rates again to increase the focus on them.

“The equity release market is continuing to gain momentum and by offering a diversified product, we are helping to drive this popularity.”

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