An equity release customer taking out a fixed rate lifetime mortgage could save around £32,000 when compared to a customer who took out a similar product just one year ago, according to data site Moneyfacts.

The interest rate on the average fixed rate lifetime mortgage has just fallen again, from 5.55% in June to 5.53% in July. This is down from 6.25% a year ago.

The impact of the reductions is significant, said Moneyfacts.

A homeowner opting to release a lump sum of £75,000 from the average fixed rate lifetime mortgage today would face an outstanding debt of £168,151 in 15 years’ time, £18,055 less than the same customer who opted for a similar equity release product a year ago.

Over a 20-year term the amount of interest saved is even higher at £32,060.

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Richard Eagling, head of pensions at moneyfacts.co.uk, said: “Even a small reduction in the interest rate can have a significant impact on the final outstanding debt.

“The extent to which equity release interest rates have dropped in recent years has not only enhanced the products’ appeal to new customers, but has also made it worthwhile for existing equity release customers to review their products.

“This is particularly the case for those who may have taken out a lifetime mortgage seven years ago, when rates peaked. With rates at record lows and a greater number and range of products to choose from, there has never been a better time to consider equity release.”