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What is Lifetime Mortgage?
A Lifetime Mortgage is a type of equity release product. It allows homeowners to borrow a tax-free lump sum against their home, while they continue to live in it.
The loan doesn’t need to be repaid until the last person on the mortgage dies or moves into long-term care. At that point, the property will be sold and the loan and its compounding interest will be repaid.
Equity release products reduce the amount of inheritance you leave, because the funds from the sale of your property will be used to pay off the loan first.
This information applies to customers with Prudential Lifetime Mortgages and Stonehaven Lifetime Mortgages.
How your Lifetime Mortgage works
Understanding your Lifetime Mortgage
If you’re considering moving to a new property you may be able to transfer your Lifetime Mortgage:
- The new home must meet lending criteria.
- A partial repayment may be required.
- You’ll need to get legal advice from a qualified solicitor.
- Have a look at our ‘Moving home’ flyer for more details.
Additional borrowing
If you have a ‘cash reserve’ and additional borrowing is available:
- Your funds could be with you in 10-12 days.
- In some cases, access to further withdrawals may be limited.
How to release additional funds
- Check your latest annual statement to see if additional borrowing is an option, and if so, what funds you have available. We send your annual statement within the first half of each year.
- A £90 fee applies for all additional borrowing payments. For Stonehaven plans, the fee will be added to the loan amount. Otherwise, it will be deducted from the amount you request.
- The interest rate that applies to the additional borrowing will be the rate applicable at the time of your request. This will be shown on your ‘Additional Borrowing Offer’ document.
If you have funds available, let us know how much you'd like to release (criteria and minimums apply).
- Call us on 0345 656 0000 (Prudential and Stonehaven plans).
- Send a message using PruMail and complete the online drawdown request (Prudential only plans).
We’ll send you an Additional Borrowing Offer document - please read this document carefully.
- There’s important information about the impact of further borrowing on your Lifetime Mortgage.
- You need to understand the offer and its associated risks by reading ‘Important information that you should consider’ in Section 7 of your Offer document.
- If you’re unsure or have any questions, please call us. You may also want to get financial advice.
If you’d like to go ahead:
- Complete the ‘Acceptance form’ within the Offer document.
- Add your bank details and sign the form.
When we receive the completed form, we’ll transfer your funds to your bank account within three working days.
Repaying your Lifetime Mortgage
If you’re thinking about repaying your Lifetime Mortgage, we recommend you consider this decision carefully to ensure it’s the right option for you at this time.
- You can repay your mortgage in full or in part at any time.
- This is a long-term loan, so if you choose to repay your loan early, charges may apply.
- An early repayment charge won’t apply if the mortgage is repaid after you pass away or if, as the sole or last remaining borrower, you need to go into long term care.
- If you have a series of loans, loans with the highest interest rate will be repaid first.
- If you have two or more loans with the same interest rate, the loan with the lowest Early Repayment charge will be repaid first.
- See ‘Tariff of charges’ for more information.
Charges and interest
- The interest rate that applies to your loan(s) is fixed when the funds are released.
- Details will be shown on your Offer Document and annual statements.
- See ‘Tariff of charges’ for more information.
Getting financial advice
If you’re making an important financial decision, or thinking about your longer term financial health, then we recommend you get financial advice.
- You should speak to your financial adviser if you have one.
- If you don’t have an adviser, you can search for an independent financial adviser by visiting unbiased.co.uk or by calling them on 0800 023 6868.
- You could speak to M&G Advice. Whether it's about financial planning, accessing your pension, making sure you get the most from your tax allowances or protecting your loved ones; whatever your financial goals – we can help.
Next steps
If you have any questions or need help with your plan, call us on 0345 640 1000. Please have your plan number ready.
We’re available Monday to Friday, 08.30 – 18:00, excluding public holidays.
We might record your call for training and quality purposes. To find out more about how we use your personal data please visit the My Data page.
