More 2 Life cuts standard rates from 6.99% to 6.25%

More 2 Life has cut the rates on its standard equity release plan from 6.99% to 6.25% as it increases the focus on its protected equity guarantee.

The lender has built a 14% market share of lump sum business through advisers in the three months to March 31.

The rate cut takes effect from today for both drawdown and lump sum business with LTV rates starting at 30% at age 70 and rising 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, says: “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.