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GE Life bucks rising trend by reducing lifetime loan rate

GE Life has slashed its lifetime mortgage rate and has become the cheapest on the market.

The company is bucking the trend in the market that has seen other providers raise their rates over recent months.

Many experts had expected last week’s Bank of England base rate increase to put further pressure on insurers and lenders to increase the cost of taking out equity-release products.

GE’s rate, compounded annually, has come down from 6.09 per cent to 5.95 per cent. The next cheapest on a comparable basis is Just Retirement at 5.99 per cent, followed by Standard Life Bank at 6.06 per cent.

The fact that GE compounds its rates annually has come in for praise from some commentators.

Equity-release specialist Rozario Harris managing director Andrea Rozario says: “GE has a damn good rate and it is a true rate. I have a bugbear with some rates that are not compounded ann-ually as it is not transparent.”

GE Life marketing and product manager Simon Little says: “We feel that we have the capacity to lower our rates and provide value for equity-release customers. We have looked at our business and we can afford this, even with what else is going on in the market.”

Data released by the Council of Mortgage Lenders shows that in the first half of this year, the number of new equity-release mortgages increased from 10,877 to 11,130 compared with the same period last year.

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