LV= is reducing its equity release rates and will no longer charge a higher rate of interest on loans over £600,000 from today.
The interest rate on LV='s lifetime mortgage for customers up to 80 years old has dropped to 6.19% AER from 6.39%.
The flexible lifetime mortgage rate was cut to 6.39% (from 6.49%) for the same age range.
Equity release specialist Hodge Lifetime also reduced the rate on its lump sum lifetime mortgage from 6.13% to 5.83% last week.
Vanessa Owen, LV= head of equity release said the reason behind removing the higher rate on higher value loans was due to scale with higher value loans having less impact on their growing portfolio. She also said it was a result of demographic change.
She said: "It is a factor as to why it's come onto our radar. It is interesting the number of enquiries we are getting [about] high value loans and much higher value properties.
"The rationale behind those loans is so varied, everything from inheritance tax to lease extension to people looking to purchase other property. The range of reasons is very diverse. It's fair to say equity release is not the preserve of the less well-off these days from an asset perspective.
"The message we wanted to get across is these interest rates are now equal and if people are looking to raise large amounts of money; it's worth looking at."
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