Prudential will launch its lifetime mortgage product at the end of September with key facts illustrations available to intermediaries from the end of August.
The provider has also announced the details of the product which will be available in two options to provider customers with as much flexibility as possible, says the provider.
The first option is a increasing loan facility with a maximum loan to value (LTV) of 15% starting as age 60 an increasing 1% per year up to a maximum of LTV of 35% at age 82. The increasing LTV is also guaranteed and is based on the value of the house at time the original loan was taken out.
The second option allows the customer to borrow an initial 20% at age 60 but once the loan is agreed it will not increase with each year. The LTV is based on the age of the youngest applicant on the application at there is a maximum LTV of 35% at age 75.
Once a customer has chosen a specific plan option they will not have the opportunity to switch to the other and there is a minimum initial loan amount of £20,000 with a minimum additional advance of £5000. Interest is also calculated on the amount the customer holds so that if they decide to drawdown £20,000 initially and then £10,000 five years later they will only pay interest on £20,000 for the first five years before paying interest on £30,000 when they receive the other £10,000.
Mark Wood, chief executive of PrudentIal, says the new product will see the provider breaking offering a product that differs from that offered by the current set of equity release providers. “The crucial thing for customers is that they are able to access a product that suits all their needs from a trustworthy provider,“ he adds.
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