More 2 Life cuts rates

More 2 Life has cut the rates on its standard equity release plan from 6.99% to 6.25%.

The lender has built a 14% market share of lump sum business through advisers in the three months to March 31st due mainly to higher loan-to-value deals available through enhanced equity release.

However it argues the advantages of protected equity guarantees should be a major driver for standard equity release products and has cut rates to increase the focus on them.

Loan-to-value rates start at 30% at age 70 and rise to 40% at age 80.

More 2 Life’s protected equity guarantee adjusts the LTV in line with the customer’s age if they withdraw more money and also protects against falls in property values of up to 5%.

The guarantee is based on the percentage of the maximum withdrawal not taken – for instance a customer who is entitled to a £50,000 withdrawal who takes out £30,000 would have a 40% protected equity guarantee equivalent to £100,000 on a £250,000 property.

Jon King, managing director of More 2 Life, said: “The rate cut reflects increasing demand in the market and helps ensure the focus is on the protected equity guarantee on standard plans.

“Intermediaries are driving expansion in the equity release market and the protected equity guarantee is proving popular with customers who want to cap loans as part of the advice process.”

The protected equity guarantee comes into effect after the death of the last surviving borrower or when they move into long-term care – known technically as fall-in.