Hodge Lifetime has reduced the interest rate on its retirement mortgage with a five year fixed rate now 4.39%.

The overall cost for comparison is 4.7% APR.

The retirement mortgage is an interest-only lifetime mortgage. While interest must be paid monthly, the loan capital can be repaid from the proceeds of selling the property and does not have to be repaid until the borrower dies or moves permanently into long term care.

Deian Jones, managing director of Hodge Lifetime, said: “As options for customers looking to borrow in retirement have reduced, especially on an interest only basis, this latest rate reduction offers advisers a competitive and flexible solution for those customers.”

Dominik Lipnicki, director of Your Mortgage Decisions, added: “Post 2008 and in particular post MMR, it has become nearly impossible to help clients past retirement, especially if interest only borrowing is required. Hodge Lifetime help to fill that product void.

“What most would find surprising is just how low the interest rate is, even lower than the SVR with Santander. This is no longer what some would perceive as lending of last resort. Hodge Lifetime products plug a real gap in the market; in essence, they help borrowers, which high street lenders chose to ignore.”