Enquiries from existing equity release customers about switching plans are on the rise beacons of record low mortgage rates, according to Bower Retirement.

Its study found 45% of Bower advisers have seen a rise in clients reacting to reductions which have seen average rates reach an all-time low of 5.63% with some providers offering rates at 3.9%.

Analysis shows average rates have dropped 0.7% in the past year and the number of fixed-rate deals has increased by nearly 60% in the past two years.

But advisers believe rates need to fall further to maintain momentum in the market which saw an all-time high of £697 million in lending in the first three months of 2017 – up 77% on the same period last year.

39% of advisers surveyed said more rate cuts were needed while 67% want more lenders to launch into the market to increase competition.

Bower’s national study shows 22% of its advisers are reporting a substantial rise in the value of homes owned by customers while 55% say property values have increased slightly in the past year. Around a quarter of advisers say customers’ average property value is now more than £400,000.

Andrea Rozario, chief corporate officer at Bower Retirement, said: “Equity release customers are benefiting from a virtuous circle with the record growth attracting more lenders who are cutting rates to compete and win business.

“Existing customers can benefit too but it is vital they get independent advice as any savings from lower rates need to be balanced against potential early redemption charges.

“Over the past few years rates have steadily fallen but lifetime mortgage rates are still being compared with mainstream mortgage rates which is a challenge for the industry and advisers.”