What is a lifetime mortgage?
A lifetime mortgage is a way for your client to release money from their home without them having to move. It’s a loan that’s secured against their home to give them a tax-free cash sum.
We offer three types of lifetime mortgages
With our Flexible Lifetime Mortgage your client won’t have to make any monthly payments. Instead the interest is added to the amount they owe each month. This means we charge interest on the loan plus any interest already added.
The lifetime mortgage is usually repaid from the sale of their home when they, or the remaining applicant (if the mortgage is in joint names) dies or moves out of their home into long term care. Of course, any money left over would be available for them or their beneficiaries.
Our PDF file: Flexible Lifetime Mortgages - All you need to know Q0054380 PDF size: 596KB includes full details about typical uses and product features, risk and benefits, and you can use it with your clients.
With our Optional Payment Lifetime Mortgage your client can choose to pay between £25 and the full monthly interest each month. This could be preferable if they're using the lifetime mortgage to repay an interest only mortgage or would like to make a regular monthly payment towards the loan interest.
Making monthly interest payments will reduce the amount of interest that will accumulate over the life of their lifetime mortgage.
Your client can choose to stop making monthly interest payments whenever they want. If they do stop, the unpaid interest is then added to the amount they owe each month. This means that interest is charged on the loan amount plus any interest already added.
Our PDF file: Optional Payment Lifetime Mortgages - All you need to know Q0056890 PDF size: 9.6MB includes full details about typical uses and product features, risk and benefits, and you can use it with your clients.
With our Income Lifetime Mortgage your client can release some of the money tied up in their home to provide a regular income, over a fixed term, with no need to make monthly payments. Your client must take an initial minimum loan of £2,500, followed by a minimum monthly income of £200 for a fixed term of 10, 15, 20 or 25 years.
The amount of monthly income and income term can't be changed once the mortgage has completed however should your client's circumstances change, they can choose to stop taking the income at any time. But, once stopped, the monthly income can't be restarted.
We charge compound interest. This means we’ll charge interest on the loan plus any interest already added. The effect of compound interest is reduced as funds are released in monthly amounts, rather than as a single upfront sum.
Once the fixed income term comes to an end, the monthly income will stop, but interest will continue to roll up until the lifetime mortgage is repaid. The lifetime mortgage is usually repaid from the sale of your client's home when they, or the remaining applicant (if the mortgage is in joint names) dies or moves out of their home into long term care.
Clients will have to pay an arrangement fee on all Income Lifetime Mortgages.
Our PDF file: Income Lifetime Mortgage - All you need to know PDF size: 10.3MB includes full details about typical uses and product features, risk and benefits, and you can use it with your clients.
Is your client eligible for a lifetime mortgage?
If your client meets the following criteria, they could be eligible for a Legal & General Lifetime Mortgage:
- Aged 55 or over.
- Living in (or buying) their own home with a small or no mortgage.
- Wants to borrow a minimum of £10,000 for our Flexible and Optional Payment Lifetime Mortgages or wants an initial loan amount of at least £2,500 with a monthly fixed income of a minimum £200 for 10 years for our Income Lifetime Mortgage.
- A homeowner of a property worth at least £100,000 (or £150,000 for ex-council, ex-housing association or ex-Ministry of Deference properties).
- Living in England, Wales or mainland Scotland.
Advising on a lifetime mortgage
Not ready to advise your client?
If you have a client that you’d like to refer, you can still help them, even if you’re not qualified to give advice on lifetime mortgages. Refer a client to TRLA and you’ll earn 1.5% of the loan amount as commission, up to £10,000. It will be paid to you once the loan has been released to your client. You'll also keep ownership of your client relationship.
We’ve chosen The Retirement Lending Advisers (TRLA) as our equity release experts, they’re a separate company that only advise on Legal & General’s Lifetime Mortgage products. If you refer your client to TRLA, they won't charge an advice fee
TRLA is an appointed representative of Key Retirement Solutions Limited. Key Retirement Solutions Limited is authorised and regulated by the Financial Conduct Authority.
Additional practical information, tools and support
If you’re looking for product information or other client-friendly support material, our adviser site is a great place to start. It’s focused on supporting you as you help your clients and includes:
- Product summaries and features.
- Technical explanations about different product features such as early repayment charges, our no negative equity guarantee and the inheritance protection option.