With a fixed rate of 6.45 per cent, the mortgage allows borrowers to save on interest by taking loans out at stages throughout the deal rather than in one lump sum.
Natalie Eyles, public relations manager at Prudential, explained: “Our new product is flexible as it allows people to draw out money as and when they need it rather than in one lump sum at the beginning of the deal, which increases the interest that clients pay.
“With the property value release plan, borrowers only take out as much as they need at any one time, making it a much more flexible and cheaper option than what is already on the market.”
Eyles went on to add: “The Prudential property value release plan has a LTV that increases by 1 per cent every year so over the lifetime of the mortgage the borrower has the ability to access up to 35 per cent LTV.”
In addition to the recent launch of its KFI quotation system, Prudential hopes to add an online calculator in late September so borrowers and advisers can work out the costs and benefits of the product’s flexible downturn.
Brendan Kearns, proposition development manager for equity release at
Norwich Union welcomed Prudential into the market. “The Pru has put together a solid proposition but it is not as innovative as it is expressing.
“From research that we have conducted, many equity release customers still prefer to take the sum in one go and put it in their banks giving them complete freedom as to what to do with it as the Pru will have certain restrictions on minimum loans.”
“Prudential’s latest offer is a solid one and is a good plan for the future as flexible downturns are set to be more popular,” he added.
