Lifetime mortgage provider Responsible Lending has unveils a lifetime mortgage interest rate of 2.51% AER.

This latest reduction represents a decrease of over 0.25 percentage points.

The company says that the frequent rate competition being seen in the market underlines the strength of the equity release sector.

Responsible Lending’s new rate is available both with and without drawdown. The 2.51% AER rate (equivalent to a 2.48% MER or monthly interest rate) is available on a sliding scale of LTVs dependent on age.

For example, a single customer aged 70 could access the rate with an LTV of up to 24% (for joint applications the LTV is up to 23%).

The minimum loan amount is £10,000 and the product has fixed and defined early repayment charges (ERC). Customers can also repay up to 10% of their loan each year without incurring an ERC.

Keith Haggart, managing director of Responsible Lending, said: “Rates have never been more competitive and this is testament to the growing appeal of the lifetime mortgage market among consumers and funders.

“We live in uncertain economic times so to be able to bring forward a rate reduction like this in the middle of a pandemic will really test the growing appetite consumers have for these kinds of products.”