Pru reveals lifetime mortgage rate


The Pru has finally revealed the rate for its lifetime mortgage, the Prudential Property Value Release Plan.

The monthly compounded rate of interest is 6.45%, with the AER for comparison 6.64% and APR 6.9%.

Pru says the rate is competitive against single lump sum providers offering a lower rate, because the client may be able to save interest by taking the loan in stages rather than all in one go.

From late September an online calculator will also be available on the Pru adviser website.

This will allow customers and advisers to see the potential benefits of flexible drawdown as opposed to a single lump sum.

In many instances, even where the headline interest rate is higher, by using the flexible drawdown facility customers may be able to save considerable amounts of interest.

As a special offer to mark the launch, customers who submit application forms before March 31 2006 will not pay the valuation fee, saving approximately 206 to 529 depending on the value of the property.

Commission to advisers will be 400 or 1% of the initial loan advanced (whichever is the greater).

The mortgage applications will be handled by Global Home Loans, the UK’s largest mortgage application processing company.

The Pru has a dedicated team at GHL with access to the latest case tracking technology, which sends automatic updates to advisers to ensure speedy service.

Ali Crossley, director of lifetime mortgages at Pru, says: “We have been working extremely hard to bring this product to market and are delighted to announce the launch of the key facts illustrations quotation system today.

The lifetime mortgage market has been in need of a shake up for some time and we’ve delivered. When we first announced the details of our flexible and innovative product, we met a very positive reaction from customers, advisers and even competitors.

We expect the level of interest from advisers over the
coming weeks to reflect this.”

A specialist team has been set up in Intermediaries to manage relationships with financial advisers and develop sales.

Jan Holt, who recently joined Pru from Norwich Union, will lead the specialist team. The team is made up of field sales and telephone account managers as well as a dedicated quotation team.

Pru’s property release plan is flexible.Customers can take their money as and when they need it. It gives them control over the amount they borrow and may save money by reducing the overall interest they pay.