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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.
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 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 TRLA to advise 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.
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A lifetime mortgage could help improve your retirement needs, however, there may be alternatives to a lifetime mortgage that may be more appropriate to your situation. As well as seeing the potential benefits of a lifetime mortgage, it’s very important to understand the risks involved:
You can relax, knowing you can stay in your home. 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.
We can’t predict how property values may change, and any fall in value will affect the equity available to you or your estate. 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, provided the property is sold for the best price reasonably obtainable and you have met your terms and conditions.
With a lifetime mortgage you can decide to arrange the loan, but not take all the money out at once with our Flexible Lifetime Mortgage – we’ll only charge interest on what you’ve borrowed to date. If you take more later the interest rate for that loan will be set at that time and may be higher or lower than the rate you pay on your initial amount.
As part of our Lifetime Mortgage, 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.
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.
We’re a member of the Equity Release Council, so you can be confident you’re in safe hands.
You could use the money to improve your general standard of living, help your children get on the property ladder or make those long overdue home improvements. Read our needs studies for further details.
Our products include a no-negative equity guarantee, so 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, provided the property is sold for the best price reasonably obtainable and you have met your terms and conditions. This 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.
So 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 may have to pay an early repayment charge to your existing lender if you remortgage.
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 relatively 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. You don’t need to worry that you’ll ever owe more than the value of your property because of our no-negative equity guarantee. 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.
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 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 release from your home with a Legal & General Lifetime Mortgage.
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Request a printed copy, or download our free guide to lifetime mortgages
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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.
Legal & General Home Finance Limited is authorised and regulated by the Financial Conduct Authority.
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