A transparent calculation to work out early repayment charges
Our lifetime mortgages last for the borrower’s lifetime, or until they enter full time residential care. But we know that plans can change, and that’s where the early repayment charge comes in. We recently introduced fixed rate ERCs for new borrowers who want to repay their loan early and now we’re launching a new gilt-based ERC too.
It only takes a few steps
The new ERC option is called the Variable gilt index ERC and it uses the UK FTSE Actuaries 15 Year Gilt Yield Index to calculate the total amount owed. By using the FTSE Actuaries UK Gilts Index Series, customers and advisers can refer to the gilt index and then use a straightforward formula to work out their ERC.
Two ERC choices for new customers
Alongside our fixed rate ERC, the Variable gilt index ERC is available as an option to all new customers wanting to take out a lifetime mortgage. Existing customers will continue to use the ERC basis agreed on their original application – this will also apply to any future borrowing.