The average rate across lifetime mortgages – for both fixed and variable varieties – has dipped below 4 per cent “for the first time on our records,” says Moneyfacts.

At 3.95 per cent this is a marked difference from the average of 4.49 per cent seen in February 2020 and 5.20 per cent recorded in February 2019.

Alongside this fall in rates is an inverse direction in product numbers – today, according to the data, there are 488 lifetime mortgages on the market as compared to 405 in February 2020 and 204 in February 2019.

This shows that lenders are moving to meet a surge in demand, says Moneyfacts, with the pandemic “clearly” having had an effect.

Moneyfacts finance expert Rachel Springall says: “In 2020, there was evidence that consumers were drawing wealth out of their homes as a support fund, as according to Key, £755m was transferred between the generations. In addition, borrowers appear to be favouring a drawdown option the most – 70 per cent of all sales in fact were for drawdown last year according to Key. By choosing a drawdown product, consumers will save interest compared to taking a lump sum.

“A retirement shortfall may well be a cause for consumers to consider a lifetime mortgage and according to analysis by the Equity Release Council, the proportion of homeowners aged 55 and over who are worried about running out of money in retirement has increased to over a third (34 per cent), up from 27 per cent a year prior.”