The average rate has increased to 4.07 per cent from the record low of 3.89 per cent seen in March but Moneyfacts said predominantly lenders had been reducing their rates in April.
Over the last five years, the average rate has fallen from 6.15 per cent and deal numbers have risen from 66 to 510.
The maximum loan-to-value (LTV) available across the market stands at 49 per cent, compared to 48 per cent a year ago.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “It’s great to see lenders working hard to cater to borrower demand as we reveal the number of equity release options have reached levels never seen before. There are now over 500 deals available and since the start of this month, lenders have continued to launch and reprice their ranges.
“Over the past two years, the average equity release rate has dropped by 1.02 per cent and there are 323 more options on the market to assess. Overall the market remains resilient despite the coronavirus pandemic.”
The volume of new lifetime mortgages taken out during the second half of 2020 rose by 19 per cent compared to the first six months of the year, according to a report by the Equity Release Council.
The report also revealed that over-55s withdrew 46p of property wealth for every £1 of flexible pension payments in H2 2020, in line with 2019.