Legal and General Equity Release & Lifetime Mortgages Review 2021
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Do any of the following apply to you?
- Do you have a mortgage you need to pay off?
- Do you require money for repairs or home improvements? Like a new kitchen or bathroom.
- Would you like to help a family member purchase their first home?
- Would you like to pay off all your credit cards and loans and have zero monthly payments?
- Would you like a better lifestyle, change your car or have a well-deserved holiday?
The brokers we work with can compare plans from many providers
Pre-Decision In Principle Application Form:
The broker will compare options from the following brands only:Aviva, Hodge Lifetime, Just (Just Retirement), Legal & General (L&G), LV (Liverpool Victoria), More2Life, OneFamily, Pure Retirement, Retirement Advantage.
Lets Get Started: L and G Equity Release Review
Legal and General are no strangers to the UK finance sector. They’ve been around since 1836 when a half a dozen lawyers in London started the company with the first issue of a Life Assurance certificate which paid out £1,000 four years later after only collecting around £177 in insurance premiums.
Not the most promising start, but over a century later, Legal and General are a household name, bringing in insurance premiums in the billions that payout in the millions.
A solid business strategy that’s now expanded into the equity release market following 2014’s acquisition of New Life Home Finance Limited.
Since Legal and General started equity release, over £600 million in funding has been released to British pensioners, affording people a more comfortable retirement and helping their families finances in the process.
Why Consider Legal and General Equity Release?
- 5-star rated by MoneyFacts.co.uk for financial services in retirement
- Inclusive inheritance protection without an added premium
- Members of the Equity Release Council requiring a high standard of customer care, outstanding value, total transparency and a no negative guarantee provided as standard
Legal and General equity release is becoming the go-to resource for banks with ageing customers on interest-only mortgages approaching maturity. In 2016, a first of its kind deal was struck between Santander and Legal and General to introduce customers on interest-only mortgages approaching maturity an alternative means to repay their mortgage in full using Legal and General equity release for finance.
The following year, the Co-operative Bank announced a similar deal for an exclusive partnership with Legal and General that’ll last for five years, letting the banks’ customers access exclusive deals to repay their entire mortgage using Legal and General equity release.
Using Legal and General Equity Release Advisors
When considering any equity release product, you need to get financial advice to make sure you’re aware of all the pros and cons and make an informed decision instead of a rash decision to release equity from your home without clearly understanding the potential ramifications.
When researching various Legal and General equity release reviews online, you’ll likely notice statements along the lines of people receiving advice from financial advisors paid for by L & G. This is legitimate, but it’s through The Retirement Lending Advisors group, which is fully partnered with Legal and General.
And can therefore only advise on equity release products provided by Legal and General. You won’t get free impartial advice from a whole of market equity release specialist, so you may still want to inquire with different equity release providers. This is to ensure the rates offered and additional features of any policy with Legal and General are in fact, the best available in the market, rather than being the best available from one provider only.
Options for Equity Release: Legal and General Lifetime Mortgages
Only lifetime mortgages are available from Legal and General. The other type of equity release is a home reversion plan, which isn’t provided by LGHF (Legal and General Home Finance). The product line-up includes a Flexible Lifetime Mortgage and the Premier Flexible Lifetime Mortgage.
About the Flexible Lifetime Mortgage
- The Flexible Lifetime Mortgage from LGHF is suitable to homeowners over 55 years of age living in England, mainland Scotland or Wales using their primary place of residence as security for equity release.
- The minimum you can borrow is £10,000 up to a maximum of £250,000.
- It is possible to release equity when you have a small mortgage balance remaining, provided the funds released are used to pay off an outstanding mortgage balance.
- There is an upper age limit of 90 years of age; however, older applicants can be considered.
- The loan-to-value (LTV) ranges for Legal and General equity release plans are from 8% up to 53%. However, for flats or maisonettes, the maximum valuation used is 85% of the property valuation.
- Tenure can be freehold or leasehold; however leasehold properties have additional requirements for eligibility. Leasehold eligibility is worked out by combining the age of the borrower (youngest if it’s a joint application) at time of completion and adding the remaining term left on the lease. The application can be considered if the combined number is over 185 years remaining on the lease.
- If using drawdown, the minimum transaction is £2,000. Interest will be charged from the date funds are released and not the date funds are approved for release.
- The plan is portable, meaning you can move home without having to repay all the capital released, provided your new home meets the security requirements of the lender. Otherwise, a partial repayment may be required. If you do need to repay some capital after moving home, no early repayment charges are applied.
- The Legal and General equity release interest rates vary from 3% to 7%, although most will be on the lower end.
To ensure you meet the eligibility criteria before applying, Legal and General equity release advisors operate through the Retirement Lending Advisors Group who will arrange either a telephone consultation or an in-person visit to assess your suitability. Advice is provided free but isn’t independent, so you may want to consider using an alternative independent financial advisor.
The main things you need to be made aware of is that these plans aren’t suitable to those who may wish to sell their property and later downsize, or currently have savings or investments that could be used for capital raising instead of raising cash through equity release. It’s also advised that if you have a secure long-term income from stable employment that would allow you to afford repayments on alternative borrowing methods, other avenues may be worth exploring before entering into a lifetime mortgage.
Anyone claiming benefits that supplement your monthly income needs to be aware that the cash lump sum released, while tax-free, can affect your eligibility for means-tested benefits.
About the Premier Flexible Lifetime Mortgage
The Premier Flexible Lifetime Mortgage works the same as the above plan, but with a minimum borrowing amount of £100,000 and up to a maximum of £2M.
Using the Legal & General Equity Release Calculator
Legal and General have a lifetime mortgage calculator available on their website, which can give you a rough indication as to how much you could borrow. As with any financial product, the amount available is not a one-size fits all as it’s highly tailored to your unique circumstances.
As an example, inputting an age of 58 with a property worth around £200,000 would show you could borrow up to £54,000. That’s going to be based on using 100% of your property valuation. If you want to factor in inheritance protection, the LTV would be lowered by how much you want to protect for your beneficiaries. If you wanted to leave at least half your property’s worth guaranteed for your loved ones, you’d need to take out a plan with 50% inheritance guaranteed. That would lower your amount available by half so instead of a property valuation of £200,000, you’d be using £100,000, which would cut the amount you could borrow by half, reducing it to £27,000.
Applying for Equity Release with Legal and General
It’s not possible to download and complete the Legal and General equity release application form as all applications are completed online and must be applied for after a consultation with a mortgage advisor as lifetime mortgages are specialist products. Legal and General can put you in touch with the Retirement Lending Group for free advice on their products only, or you can arrange for impartial advice from an independent equity release advisor without affiliations to any equity release provider for true impartial advice on equity release products and suitability from across the whole of market.
Contact Us Today to Find Out if Legal and General Equity Release Could be a Good Fit for You!