What is a lifetime mortgage?
A lifetime mortgage is a type of equity release - it's a loan secured against your home which lets you release money as a cash sum or a regular income over a fixed term.
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.
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.
- With all of our Lifetime Mortgages, any unpaid interest is added each month to the amount you owe and will increase quickly over time. Interest is charged on the loan plus any interest already added. However there are repayment options, which could help you manage the interest you owe. There may be cheaper ways to borrow money.
- A lifetime mortgage will reduce an inheritance and reduce the equity left in your home.
- It may affect your entitlements 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 that 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.
Why do I need to get professional advice to apply for a lifetime mortgage?
You can only get a lifetime mortgage through an adviser. It's a big decision and they can help you review all of your options. An adviser will explain the features and risks of the product in detail and make a personal recommendation to you.
You can talk to your own adviser or we can put you in touch with The Retirement Lending Advisers, a separate company who only advise on our Lifetime Mortgages and are not part of Legal and General. If you use them, they won't charge you an advice fee.
Find out more about what to expect from an adviser in our animation.
How can I find an independent financial adviser that can help me with lifetime mortgages?
Visit the Link to Equity Release Council's website where you can search for qualified advisers in your area.
What is equity release?
Equity release allows you to release some of your home’s value, tax-free. You can take the maximum available to you in one go, or in smaller amounts as and when you need it. You won't have to sell the property while you're living there and, with certain equity release products, you won't have to make payments during the lifetime of the loan.
What are the types of equity release?
There are two types of equity release: lifetime mortgages and home reversion plans. Legal & General don't offer home reversion plans.
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 do not offer a Home Reversion Plan.
How is a lifetime mortgage different to 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||Traditional Mortgage|
|Length of the loan||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 means interest is charged on the loan plus any interest already added. 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 or Income 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 amongst other factors. ||Your income, expenditure and other financial commitments will be reviewed to ensure you can afford the monthly payments. |
|Interest rates ||The interest rate is fixed for the length of the lifetime mortgage. ||There are a variety of interest rates you can choose from. The most common are variable or fixed. |
What’s the difference between independent financial advisers and TRLA?
Independent financial advisers can give advice on all lifetime mortgages available in the market. The Retirement Lending Advisers (TRLA) only advise on Legal & General 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 other options to borrow money that are more cost effective.
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 we can put you in touch with The Retirement Lending Advisers. They're a separate company who only advise on our Lifetime Mortgages and they are not part of Legal & General. If you use them, they won't charge you an advice fee.
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.
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.
You can use your own adviser or if you don't have one you can find a qualified adviser in your area by visiting the Link to Equity Release Council's website.
Alternatively, we can put you in touch with The Retirement Lending Advisers, a separate company who only advise on our Lifetime Mortgages. If you use them, they won't charge you an advice fee.
You can request a free call back from The Retirement Lending Advisers.
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.
If you choose to use The Retirement Lending Advisers, a separate company who only advise on our Lifetime Mortgages, they won't charge you an advice fee.
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 money you could potentially release from your home.
It's only an estimate; the actual amount depends on a number of factors, and your financial adviser can explain these to you.
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 die or move out of the home into long-term care. However, with our Lifetime Mortgages you can make Optional Partial Repayments (OPR) if certain criteria are met. If you decide you want to repay the loan early outside of 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 property owner dies or moves out of the home into long-term care.
If you decide you want to repay the loan early outside of 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 (or both of you if borrowing jointly) stay in your home until you die or move out of the home into long-term care, as long as you comply with the product 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 or your beneficiaries will never have to pay back more than the amount your property is sold for, provided it is sold for the best price reasonably obtainable.
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.
I have a Legal & General Lifetime Mortgage. How can I make a complaint?
We hope you'll 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 complaints team using the details shown below. We'll try our very best to resolve your complaint within three working days.
Write to us at: Legal & General Home Finance, PO Box 17225, Solihull B91 9US
Call us on: 03330 048444. Lines are open 8.30am to 5.30pm Monday to Friday. Call charges will vary.
Email us at: firstname.lastname@example.org.
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 cannot 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 explain the outcome of your complaint.
- 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:
Address: The Financial Ombudsman Service, Exchange Tower, London, E14 9SR
Telephone: 0800 023 4 567 or 0300 123 9 123 or if calling from outside the UK +44 20 7964 0500