The reduction comes just a month after it lowered its rate to 2.78% AER (2.75% MER).

The firm said that the frequent rate competition being seen in the market underlines the strength of the equity release sector.

Minimum loan amount is £10,000 and the product has fixed and defined early repayment charges (ERC). Customers can also repay up to 10% of their loan each year without incurring an ERC.

Keith Haggart, managing director of Responsible Lending, said: “Rates have never been more competitive and this is testament to the growing appeal of the lifetime mortgage market among consumers and funders.

“We live in uncertain economic times so to be able to bring forward a rate reduction like this in the middle of a pandemic will really test the growing appetite consumers have for these kinds of products.”

Responsible Lending’s new product is available through Responsible Life.