There are two types of equity release: lifetime mortgages and home reversion plans. Legal & General only offer lifetime mortgages, which is what we’re explaining here.
It’s important to understand that we charge interest on the total loan amount plus any interest already charged. The amount you owe grows quickly and reduces the equity left in the property.
The loan is repaid in full along with the interest built up, from the sale of the property when you die or move into long-term care. If you make a joint application, then the sale happens when the last named person living in the property dies or moves into long-term care.
The money you borrow with a lifetime mortgage could be used to repay your outstanding mortgage balance. A lifetime mortgage works differently to a residential mortgage, which is a loan usually required to help buy a home. Some of the main differences include no need to make monthly payments, and the duration of the loan is not fixed as it is repaid when you die, or move into long term care.
More details on the differences between residential mortgages and lifetime mortgages can be found in our Guide to Lifetime Mortgage.
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It’s important to use other savings or investments first before you think about taking out a lifetime mortgage and you should consider other options to borrow money which may be more cost effective. A specialist lifetime mortgage adviser will look at your situation and explain what all the features and risks are before you apply for our Lifetime Mortgage.
You can speak to your own financial adviser or alternatively, we can put you in touch with The Retirement Lending Advisers (TRLA), a separate company who only advise on Legal & General's Lifetime Mortgages. If you use them, they won't charge you an advice fee.
For customers who were charged an advice fee by an independent financial adviser, the majority paid £1,034 or more. This fee could have been saved if they had used TRLA to advice them on their Legal & General Lifetime Mortgage.
Savings are based on advice fees paid by Legal & General customers between January and June 2017. Independent financial advisers can give advice on all lifetime mortgages available in the market. Advice fees vary and any actual savings will depend on your individual circumstances.
A lifetime mortgage is a specialist financial product, and there may be alternatives that are more appropriate for your situation. As well as seeing the potential benefits of a lifetime mortgage, it’s very important to understand the risks involved:
If you still have a balance owing at the end of your interest only mortgage, you must use the money you borrow with a lifetime mortgage to repay this in full.
We can’t predict how property values may change, and any fall in value will affect the equity available to you or your estate. However, our no-negative equity guarantee means you or your beneficiaries will never have to pay back more than the sale proceeds, after the sale costs of the property have been paid. This is provided your home is sold for the best price reasonably obtainable and you have met your terms and conditions of your lifetime mortgage.
It takes less than a minute to find out. Use our simple equity release calculator to see how much tax-free cash you could release from your home.
You can relax, knowing you can stay in your home – that’s guaranteed. Unless you choose to repay it early, which may be expensive, a lifetime mortgage is only repaid when your property is sold. That usually happens when the last plan holder dies or moves into long term care.
As part of our Lifetime Mortgages, we offer Inheritance Protection. This option will reduce the amount you can borrow, but it can help you secure an inheritance for your family or anyone else who you’d like to benefit from your estate. If you require the maximum loan amount to repay your residential mortgage, inheritance protection may not be available.
We’re a member of the Equity Release Council, so with Legal & General, you can be confident you’re in safe hands
Our products include a no-negative equity guarantee, so you or your beneficiaries won't be left with an outstanding mortgage debt after your home is sold, which means greater peace of mind for you and your family.
A lifetime mortgage will reduce an inheritance and if property values fall, that may affect the equity available to you or your estate.
That means you have more to spend on the things you really want or need. If you already have a mortgage on your home, you must pay that off completely first. If you’re applying for our Lifetime Mortgage, we’ll insist you use part of the loan to do this before accessing the rest of the money.
You will need to make sure the amount you're eligible to borrow with our Lifetime Mortgage will completely pay off your Santander mortgage balance, this may include other savings, investments or sources of income that you could use as payment towards this.
If you take it in smaller amounts, the interest for each amount will depend on the interest rates available at the time.
We work out the interest on the total you owe – both the original loan and the interest that is added over time.
This is called compound interest and it increases the outstanding balance quickly, and means that the total amount you owe grows over time and will reduce the amount of equity available to you or your estate.
If the property does fall in value it is possible that the amount of equity left in your property when it is sold and the loan repaid is zero. Our no-negative equity guarantee means you don't need to worry about ever owing more than the value of your property. This is provided the property is sold for the best price reasonably obtainable and you have met your terms and conditions. If your property grows in value this will have an affect on the amount of equity that you have left. Your financial adviser will be able to explain more about the possible effects of changes in property value.
However, that’s why we offer an Inheritance Protection option.
It will reduce the amount you can borrow, but it will make sure there’s equity left to be passed on to the people you love. This is provided at no additional cost, but can only be selected when you first take out your lifetime mortgage. We strongly recommend you talk to your family about taking out a lifetime mortgage before making a decision to go ahead. Inheritance protection is only available if there is enough equity left in your home after your Interest Only mortgage has been repaid.
Don’t worry, a specialist lifetime mortgage adviser will explain how you may be affected before you make the application, and also let you know if there are any benefits you’re missing out on at the moment. The adviser will also let you know if your personal situation means a lifetime mortgage isn’t appropriate for you at the moment.
There may be other products or options available to you that are more appropriate for your situation. You should consider other options to borrow money which may be more cost effective.
If you use The Retirement Lending Advisers, a separate company who only advise on our lifetime mortgages, they won't charge you an advice fee.
If you would like to find out whether you might be eligible for a Legal & General Lifetime Mortgage or to discuss your existing mortgage balance, then please call Santander directly, who will be able to help you with this.
If you have an adviser, you can discuss it with them. Alternatively, we can put you in touch with The Retirement Lending Advisers, a separate company who only advise on Legal & General's lifetime mortgages, who will be happy to help you.
The Retirement Lending Advisers won’t charge you an advice fee. For our customers who were charged an advice fee by an independent financial adviser, the majority paid £1,034 or more. This fee could have been saved if they had used The Retirement Lending Advisers to advise them on their Legal & General Lifetime Mortgage.
Our lifetime mortgage calculator makes it easy to see how much money you could borrow with a Legal & General Lifetime Mortgage.
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Download our free guide to lifetime mortgages to find out more.
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Legal & General Home Finance is a wholly owned subsidiary of Legal & General Group plc. Registered in England and Wales number 04896447. Registered office: One Coleman Street, London EC2R 5AA.
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