Stonehaven has reduced the rate for its lump-sum product from 6.08 per cent to 5.92 per cent and its interest-only product from 6.29 per cent to 6.08 per cent.
In Retirement chief executive Ged Hosty says while prices are generally going up because of accurate risk pricing, this new rate is “stunning value”.
He says: “This is the first major decrease I have heard of for quite a while. Norwich Union restructured and relaunched but this is the first. It is an amazing rate.”
Key Retirement business development director Dean Mirfin says the new rates are the lowest around.
He says: “The thing about this market is that the slightest difference in rate, because it is compound interest, makes quite a big difference to cost, so it is a very good move.
“For those committed to dealing in this market, for example, Stonehaven, to find a way of competing aggress-ively in the current climate is a good achievement.”
Stonehaven founder and chief executive Jayne Almond, former managing director of Barclays/Woolwich mortgage business, says: “Everyone has their different sources of funding and the way we price is based around long-term swaps. This is a very good rate which hopefully will attract more customers to think about equity release as an option.”
According to Hosty and Almond, the equity release market has fared “considerably well” in an uncertain market.
Almond says: “We are waiting for the Q3 figures from Ship but equity release has stood up much better than the main street market. Just how well remains to be seen.”