Legal & General has launched a lifetime mortgage charging a market leading 4.99% APR on larger loans.
Its Premier Flexible deal is a drawdown lifetime mortgage that allows borrowers with homes worth more than £533,000 to release a portion of the wealth stored in their property.
It is subject to a minimum loan amount of £200,000.
The insurer claims that a couple aged 77 releasing £1 million from a property worth £5 million would save £70,000 in interest over 15 years compared to many other products on the market.
Bernie Hickman, managing director, individual retirement at Legal & General, said the deal brings lifetime mortgage rates below the psychologically important 5% level for the first time. "As such it marks an important milestone in our commitment to growing the retirement lending market in the UK.”
Nigel Waterson, chairman of the Equity Release Council, said the deal could be a “genuine game-changer”.
“Product innovation of this sort – together with the industry standards - will further mainstream equity release in 55+ financial planning."
Dean Mirfin, director at Key Retirement, added: “Legal & General continues to innovate with interesting products and features."