The all-time lowest fixed interest rate for a lifetime mortgage has been launched in the UK by Responsible Lending.

The provider’s new ‘best buy’ rate of 2.82% APR (2.74% MER) beats its own previous market-leading rate of 3.02 APR (2.98% MER), which was released in August.

Responsible Lending noted that lifetime mortgage interest rates have been falling throughout the industry, sparked by a record number of sales in the bulk annuity sector.

With gilt rates falling, those managing investments on behalf of annuity providers have been turning to lifetime mortgages as a stable low-risk investment, the company added. This increased demand for investment opportunities in lifetime mortgages has driven rates down to record lows for consumers.

Responsible Lending’s latest rate is available both with and without drawdown. The 2.82% APR rate is available on a sliding scale of LTVs dependent on age. For example, a customer aged 70 could access the rate with an LTV of up to 24% (for joint applications the LTV is up to 23%).

The minimum loan amount is £10,000 and the product has fixed and early repayment charges, although customers can repay up to 10% of their loan each year without incurring such a charge. The new product is available through Responsible Life’s Retirement Mortgage Service and there is no upfront fee.

Responsible Lending’s managing director, Keith Haggart, said: “We are extremely pleased to be able to beat our own market-leading rate to set a new all-time low for the industry. Lifetime mortgages have become hugely popular, and increased interest from investors has inevitably followed.

“Consumers now benefit from an enormous range of products and the most competitive rates the industry has ever seen, cementing the place of lifetime mortgages as a primary option for later-life borrowing.”

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