Pure Retirement said that the product had reached a high of 6.57 per cent in mid-October as lenders in the space increased their rates and removed products due to financial market uncertainty from the mini Budget.
The product is available to 55 to 84-year olds with maximum loan-to-value dependent on age. It can be sourced on the lender’s online portal or through major sourcing platforms.
The classic range offers a free Energy Performance Certificate to all customers on completion and a 21-day rate guarantee post-key facts illustration.
Customers can also make 12 optional early repayment charge (ERC) free repayments per year, or up to 10 per cent of the initial amount borrowed in a 12-month period can be repaid with no ERC.
The lender said it had also introduced an underwriting promise, where there is a dedicated underwriter from application to offer.
It said that due to this, over the last quarter, 68 per cent of lifetime mortgage applications had been processed in two hours, with 98 per cent dealt with 24 hours.
Brokers had raised concerns after the mini Budget that rising equity release prices and rolling-up debt could hit the property value faster, so borrowers accrue debt at a faster rate.
According to Moneyfacts, the average lifetime equity release rate, both fixed and variable, as of November was 8.13 per cent and has been steady rising since February. In November last year the average rate was 4.38 per cent.
Figures also showed that the number of equity release deals has contracted to 310 in November, which is down from 527 in October and 811 in November last year.
‘Mini Budget sent shockwaves through equity release market’
Pure Retirement’s head of products Brendan Gilligan said: “It’s safe to say that the mini Budget has caused significant shockwaves which have impacted the equity release market.
“It’s therefore heartening to see sub-six per cent rates emerging again, and that Pure Retirement are able to offer consumers a market-leading solution at a time when many will be investigating their long-term financial options.”
He added: “Not only is it vital to offer these product solutions, but also to ensure that service levels deliver efficient application turnaround times to maintain the strength of the market.”
