Legal & General Lifetime Mortgage review
This Legal & General lifetime mortgage review forms part of a series of equity release reviews , where we have appraised all the leading providers, to help you compare the various plans on offer and consider which one may be right for you.
Legal & General is one of the world’s largest insurance and investment management companies, and the UK’s leading pension fund asset manager. The company is authorised by the Financial Conduct Authority, and a member of the Equity Release Council, which means you're protected by the Council's rules and principles.
Most recently, Legal & General has won ‘Later Life Lender of the Year’ at The Mortgage Awards 2020 and ‘Best Equity Release Provider/Lifetime Lender’ at the Mortgage Strategy Awards 2020.
L&G equity release – in summary
Legal & General offer three types of lifetime mortgage, all of which are Moneyfacts 5-star rated:
- The L&G Flexible lifetime mortgage – lets you release a lump sum, or a series of lump sums, and pay nothing until you die or move into long-term care
- The L&G Optional Payment lifetime mortgage – lets you release a lump sum, or a series of lumps sums and repay some or all of the interest
- The L&G Income lifetime mortgage - Lets you release an initial cash sum and receive a regular monthly income for 10, 15, 20 or 25 years
All share the following features:
- The maximum you can borrow will be based on your age and the value of your property.
- Interest is calculated daily and added to the total amount on a monthly basis.
- No negative equity guarantee ensures you will never owe more than the value of your home.
- You don't have to make any repayments until you die or move into long-term care.
- You can continue living in your home until you die or move into long-term care.
- Someone else can live in your home with you, but they may need to seek legal advice and sign a form stating that they know the property has a lifetime mortgage on it.
- You can move home, as long as your new home meets the lifetime mortgage lending criteria.
Remember, inflation may reduce the value of the monthly income you receive over time and taking out a lifetime mortgage might affect your entitlement to means-tested benefits or pension credit.
Features of the L & G Flexible and Optional Payment lifetime mortgage
- You can borrow a tax-free lump sum or a series of lump sums at times to suit your needs
- You must borrow at least £10,000 on your first release, and a minimum of £2,000 for any future lump sum
- Future drawdowns will be charged at the interest rate at the time, not at your initial interest rate
- You can choose to pay the lifetime mortgage off early if you wish, but you may be charged an early repayment fee
- Optional Payment lifetime mortgage only: you can pay some or all of the monthly interest to reduce the cost of your loan.
Unique features of the L& G Income lifetime mortgage
- Use the value of your home to provide a monthly income of at least £200 a month, for a set period of 10, 15, 20 or 25 years
- You start with an initial lump sum payment of at least £2,500
- You can make partial repayments if you want to reduce the amount you owe on the loan and interest
- You can stop the payments whenever you wish. However, once you've stopped receiving the regular income, you can't restart it.
- You will need to pay an arrangement fee.
- Once the fixed income term ends the monthly income will stop but interest will continue to accumulate until the lifetime mortgage is repaid.
To apply for a Legal & General Lifetime Mortgage, you need to meet all these eligibility criteria:
- You are at least 55 years of age
- The equity release property is your main home
- You own the property – you may still be eligible if you have a small mortgage, but you will need to pay it off with your lifetime mortgage.
- The property is worth more than £100,000 (£150,000 for ex-council property)
- It is built of standard construction and located in England, mainland Scotland or Wales
Legal & General’s equity release advice
Legal & General works with The Retirement Lending Advisers to advise you on all your options and help you decide which equity release plan is right for you. There is no fee for this service, but you should be aware that they only offer advice on Legal & General lifetime mortgages and not on equity release schemes provided by other companies.
It’s important to remember that not all advisers look at the whole market, and as a result, might not offer the most appropriate plan for your needs. This is why we've teamed up with leading specialist Age Partnership. They can advise and quote on schemes across the whole market, including Legal & General, and they guarantee to beat any like-for-like equity release quote or give you £500 if not.