Frequently asked questions
What is a lifetime mortgage?
A lifetime mortgage is a loan secured against your home that must be used to pay off your existing mortgage balance in full, including any early repayment charges that may apply.
If there’s still money available to borrow, you can either take it all at once, or in smaller amounts when you need them.
If you take smaller amounts later, a different interest rate may apply to each amount you take, depending on the interest rates available at the time.
Our Lifetime Mortgages are usually repaid from the sale of your home when the last surviving borrower dies, or moves out of their home and into long-term care.
Can I use a lifetime mortgage to repay my existing mortgage balance?
Yes. You must use the lifetime mortgage to pay off your existing mortgage balance in full, including any early repayment charges that may apply.
If there is anything left after repaying your mortgage balance, you may use it as you wish, for example, for home improvements, holidays or to improve your quality of life.
Are there any risks with a lifetime mortgage?
Yes, there are. It’s very important to understand the risks as well as the potential benefits of taking out a lifetime mortgage.
For both our Lifetime Mortgages, any unpaid interest is added each month to the amount you owe and will increase quickly over time. This means interest is charged on the loan plus any interest already added. A lifetime mortgage will reduce an inheritance and the equity left in your home.
You should consider if there are cheaper ways for you to borrow money. It may affect your entitlement to state benefits.
A lifetime mortgage is a loan secured against your home. Repaying a loan early could mean substantial early repayment charges.
If property values fall, then it may affect the equity available to you or your estate.
A lifetime mortgage adviser can explain the features and risks in detail and make a personal recommendation to you.
Find out more about the risks of a lifetime mortgage.
What is equity release?
Equity release allows you to access some of your home’s value, tax-free. There are two types of equity release: lifetime mortgages and home reversion plans.
A lifetime mortgage is a loan secured against your home that allows you to release some of the money tied up in your property. A home reversion plan allows you to sell all or part of your property in return for a tax-free lump sum, a regular income, or both, but stay on in your home as a tenant, paying no rent.
Legal & General only offer lifetime mortgages.
What is a Home Reversion Plan?
Home reversion plans account for less than 1% of the market. With this type of plan, you sell some or all of your home in exchange for a tax-free cash lump sum and a guaranteed lifetime lease with no monthly repayments to meet. You can stay in your home rent-free for as long as you choose. If you’ve not exchanged 100% of the value of your home, then you share with the home reversion plan company any increase in the value of your property.
Legal & General does not offer a Home Reversion Plan.
How is a lifetime mortgage different from a residential mortgage?
A residential mortgage is a loan, usually used to help you buy your home. A lifetime mortgage works differently and the table below shows the main differences:
|Feature||Lifetime Mortgage||Residential mortgage|
|Loan term||The duration of the mortgage is not fixed.||The length of the mortgage is set when you first take it out.|
|Interest charges||Any unpaid interest charged is added to the amount you owe each month. This is sometimes called compound interest or rolled-up interest.||Interest is calculated either monthly or annually on the remaining loan amount on a specified day.|
|Monthly payments|| |
If you take out our Flexible Lifetime Mortgage, you won't have to make monthly payments.
With our Optional Payment Lifetime Mortgage, you can choose to pay some, or all, of the monthly interest, but you can also stop making monthly interest payments at any time.
|A monthly payment is required until the end of the loan.|
|Affordability||Your affordability will not be assessed. Instead, the amount you can borrow depends on your age, the value and the suitability of your home among other factors.||Your income, expenditure and other financial commitments will be reviewed to ensure you can afford the payments.|
|Interest rates||The interest rate is fixed for the length of the loan.||There are a variety of interest rates you can choose from. The most common are variable or fixed.|
Why do I need to get professional advice to apply for a lifetime mortgage?
You can only get a lifetime mortgage through a specialist adviser. It’s a big decision and they can help you review all your options. An adviser will explain the benefits and risks of the product in detail and make a personal recommendation to you.
You can talk to your own adviser, or View - The Co-operative Bank can put you in touch with The Retirement Lending Advisers. They're not part of Legal & General they're a separate company who only advise on our Lifetime Mortgages. If you use them, they won’t charge you an advice fee.
If a lifetime mortgage isn’t right for you, The Retirement Lending Advisers will let you know.
Find out more about what to expect from an adviser in our animation.
What’s the difference between independent financial advisers and The Retirement Lending Advisers (TRLA)?
Independent financial advisers can give advice on all lifetime mortgages available in the market. You'll usually be charged an advice fee. TRLA only advise on Legal & General Lifetime Mortgages. If you use them, they won't charge you an advice fee.
How can I find an independent financial adviser that can help me with lifetime mortgages?
How do I know if an adviser is qualified to advise me on lifetime mortgages?
Lifetime mortgage advisers will be able to tell you about the exams they’ve taken, and the work they’re doing with lifetime mortgage providers like Legal & General.
Alternatively, View - The Co-operative Bank can put you in touch with The Retirement Lending Advisers. They're not part of Legal & General, they're a separate company who only advise on our Lifetime Mortgages. If you use them, they won’t charge you an advice fee.
What fees will I have to pay with a Legal & General Lifetime Mortgage?
Initial costs vary. For more information please ask your adviser for a copy of our Tariff of Charges. In addition you may also have to pay an advice fee and solicitors fees.
If you choose to use The Retirement Lending Advisers, they won’t charge you an advice fee. The Retirement Lending Advisers are not part of Legal & General, they're a separate company who only advise on our Lifetime Mortgages.
Is a lifetime mortgage right for me?
It’s important that you consider other savings or investments before taking out a lifetime mortgage. There may be cheaper ways to borrow money.
Speak to a lifetime mortgage adviser to find out if a lifetime mortgage would be right for you. You could talk to your own adviser, or View - The Co-operative Bank can put you in touch with The Retirement Lending Advisers. They’re not part of Legal & General, they're a separate company who only advise on our Lifetime Mortgages. If you use them, they won’t charge you an advice fee.
Will a lifetime mortgage affect any inheritance?
Yes. When you take out a lifetime mortgage, the value of any inheritance you leave after your death will be lower.
Our Lifetime Mortgages offer Inheritance Protection at no additional cost, which can help you secure a percentage of the net sale proceeds of your home for your beneficiaries, though it will reduce the amount you can borrow.
If the maximum loan amount is required to repay the residential mortgage, Inheritance Protection may not be available.
How does a lifetime mortgage affect inheritance tax?
A lifetime mortgage will reduce the value of your estate for inheritance tax purposes. When you meet your adviser, you’ll be asked about your plans for the future and be encouraged to consider the impact of a lifetime mortgage.
If you give the money away, the recipient may have to pay inheritance tax in the future.
Can I pay my interest?
With our Optional Payment Lifetime Mortgage, you can choose to pay some, or all, of the monthly interest by Direct Debit. If you choose this product, it could help you reduce the overall cost of the loan.
If you stop making monthly interest payments on our Optional Payment Lifetime Mortgage, or if you choose our Flexible Lifetime Mortgage, you can still pay part of the mortgage off early with no Early Repayment Charge using the Optional Partial Repayment feature, subject to our Terms and Conditions.
How is interest calculated?
With both products, interest is charged on the loan amount plus any unpaid interest already added. This means the amount you owe will increase quickly over time, reducing the equity left in your home and the value of any inheritance.
However, you can choose to make Optional Partial Repayments or monthly interest payments if you choose our Optional Payment Lifetime Mortgage.
What is the Optional Partial Repayment (OPR) feature?
With our Lifetime Mortgages, you can pay part of the mortgage off early with OPR's, subject to our Terms and Conditions being met.
Please see "Can I repay a Legal & General Lifetime Mortgage early?" for more information.
Will I have to make monthly payments?
If you take out our Flexible Lifetime Mortgage, you won’t have to make monthly payments.
With our Optional Payment Lifetime Mortgage, you can choose to pay some, or all, of the monthly interest. If you choose this product, it could help you reduce the overall cost of the loan. You can stop making monthly interest payments at any time.
Can I get a lifetime mortgage if I already have a mortgage?
You may still qualify for a lifetime mortgage but you'll need to pay off your existing mortgage using money from the loan. If you pay off your existing mortgage you may have to pay an early repayment charge to your existing lender.
You should think carefully before securing a new debt against your home.
Can I get a lifetime mortgage if there’s someone else living with me in the home?
Yes, but if it’s someone living there permanently then it would be a good idea for them to take legal advice. We may ask them to sign a form acknowledging that they know there is a lifetime mortgage on the property.
How much money will I get with a Legal & General Lifetime Mortgage?
Everyone’s situation is different. Our lifetime mortgage calculator can help you work out how much you could borrow.
This is only an estimate; the amount you can release depends on your property and your individual circumstances. Speak to an adviser to find out how much you could release.
Will a lifetime mortgage affect my state benefits?
Your entitlement to state benefits could be affected by a lifetime mortgage.
Everyone’s situation is different, which is why we encourage you to look at other options as well.
Your adviser can help you understand how any benefits you’re receiving may be affected.
Will a lifetime mortgage affect my tax position?
The money you receive will be paid free of tax. Depending on what you do with the money, tax may become payable. Please talk to your adviser to find out how it may affect your tax position.
If my partner and I separated or divorced and we had a joint lifetime mortgage, what would happen?
You would need to take legal advice from a qualified professional; the options would vary depending on your circumstances.
Some options could include selling the house, repaying the loan, and dividing the remainder between you; you could decide who’ll be the owner and we could remove the other person from the title deeds; or, if a court is involved, any equity left after the property has been sold and our loan repaid, would be distributed as directed by the court.
Can I repay a Legal & General Lifetime Mortgage early?
You only need to repay the full loan plus interest when you or the last surviving borrower dies, or moves out of the home and into long-term care. However, with our Lifetime Mortgages you can make Optional Partial Repayments (OPRs) if certain criteria are met. If you decide you want to repay the loan early outside the terms of our OPR, you may need to pay an Early Repayment Charge which could be substantial.
With a Legal & General Lifetime Mortgage, will I still own my home?
Yes. With our Lifetime Mortgage, the property stays in your name and the loan is secured against your home. Unless you choose to repay it early, a lifetime mortgage is only repaid when your property is sold. This usually happens when the last surviving borrower dies, or moves out of the home and into long-term care.
If you decide you want to repay the loan early, outside the terms of our Optional Partial Repayment feature, you may need to pay an Early Repayment Charge which could be substantial.
With a Legal & General Lifetime Mortgage, can I move home?
Yes, as long as the new property meets our lending criteria and there’s enough equity in the property after it’s sold. You must tell us in advance if you wish to move and we’ll need to give our consent.
Your new property will be valued by a valuer that we’ll choose — and you’ll have to pay the valuation fee, the property transfer fee, all legal fees and any moving expenses. Depending on the situation, you may have to repay part of the loan if it exceeds the amount we would agree to lend to a new customer in comparable circumstances. There would be no early repayment charges on that amount.
With a Legal & General Lifetime Mortgage, in the future could you make me leave my home?
With our Lifetime Mortgage you stay in your home until you or the last surviving borrower dies, or moves out of the home and into long-term care, as long as you comply with the terms and conditions which your adviser will explain to you.
Failure to comply with these could result in the forced sale of your property and the loss of the right to Inheritance Protection, if this has been chosen.
What happens if the property market falls in value and I have a lifetime mortgage?
Our Lifetime Mortgage comes with a No Negative Equity Guarantee. It means that even if your home goes down in value, you and your beneficiaries will never have to pay back more than the amount your property is sold for.
This is provided your home is sold for the best price reasonably obtainable and you have met the Terms and Conditions of your lifetime mortgage.
Your financial adviser will explain the Terms and Conditions of this.
What happens if the property market goes up and I have a lifetime mortgage?
If the price of your house increases, it will affect how much equity you have left. Your financial adviser will be able to explain more about this.
How long does it take to get a lifetime mortgage?
If, having seen a financial adviser, you choose Legal & General, we’ll get your property valued and send an offer out to you as soon as we can.
It’s likely to be in the region of seven weeks before the money is in your bank account. However, times can vary on a case-by-case basis and it depends on your home and your personal circumstances.
Is a lifetime mortgage safe?
We’re a member of the Equity Release Council, so with Legal & General you can be confident you’re in safe hands. It’s important, however, to carefully consider if a lifetime mortgage is right for you.
What can I spend the money on?
It’s up to you. Once you’ve repaid your existing mortgage balance, if there’s any money left to borrow you can spend it on anything you want or need to help improve your retirement.
I have a Legal & General Lifetime Mortgage. How can I make a complaint?
We hope you will always be satisfied with the service you receive from us. If this is not the case, we want you to tell us about it, so we can work with you to understand what has happened and put it right as quickly as we can.
Step 1 – if you have a complaint about any part of our service, you can contact our Customer Outcomes Manager using the details shown below. We’ll try our very best to resolve your complaint within three working days.
Write to us at: Customer Outcomes Manager, Legal & General Home Finance, Chadwick House, 737 Blenheim Court, Solihull, B91 2AA.
Call us on: 03330 048444. Lines are open 8.30am to 5.30pm, Monday to Friday. We may record and monitor calls.
Email us at: email@example.com
Please include your phone number, so we can call you about your email Monday to Friday between 9am and 5pm. When sending emails you should not include any personal, financial or banking details, as this method is not a secure way of supplying information.
Step 2 – where we can't resolve your complaint within three working days because we need to investigate more, we'll send you a written acknowledgement within five working days. We'll then undertake a full investigation to let us to make an informed assessment of your complaint.
Step 3 – we'll send you a final response within eight weeks which will let you know the outcome of your complaint and the reasons for that.
Step 4 – after our investigation, if you’re still unhappy with our response to your complaint, you can choose to refer it to the Financial Ombudsman Service. They provide a free, independent service to help resolve complaints. Their contact details are shown below:
Address: The Financial Ombudsman Service, Exchange Tower, London, E14 9SR
Telephone: 0800 023 4567 or 0300 123 9123 or if calling from outside the UK +44 20 7964 0500