Legal and General entered the equity release marketplace in early 2015 by acquiring existing lifetime mortgage company New Life Mortgages. This enabled them a quicker root to market with immediate permissions, whilst at the same time obtaining PRA & FCA regulatory approval.
Legal & General have started life with a range of flexible drawdown lifetime mortgage plans all with the control-ability measure of the 10% partial repayment function. They have more equity release plans in store with an aggressive target to grow the market significantly over the forthcoming years, which all bodes well for an already expanding post retirement lending market.
The Legal & General Flexible Lifetime Mortgage scheme is specifically designed for those looking for one of the lowest equity release interest rates, coupled with the flexibility of a lifetime drawdown scheme.
The minimum property valuation applicable to this Flexible Lifetime Mortgage is £100,000, with a figure of £150,000 for ex-council properties. A maximum property valuation outside London is £2m, with properties in London being acceptable upto £4m.
The location of the main residence must be in England, Wales and mainland Scotland. For flats & maisonettes Legal and General will only make their calculations based on 85% of the current market valuation. Additionally, should the property be leasehold then the minimum number of years remaining must be at least 185 years.
The L&G Flexible Lifetime Mortgage is available on both a single and joint life basis. The minimum age of youngest homeowner needs to be at least 55, with a typical maximum age of 90. (In certain circumstances an age of 90+ can be acceptable – please contact the team if so).
The minimum loan for this plan is £10,000 with a maximum release of £750,000. For loans greater than £750,000, bespoke quotations are available.
Legal and General’s Flexible Plan is a drawdown lifetime mortgage scheme. This drawdown product provides an initial tax-free lump sum cash release for immediate use, with any remaining unused cash being retained in an uncapped cash reserve facility. This is ideal for those looking for access to a large cash drawdown facility for the future with the lowest equity release interest rate possible. The minimum withdrawal amount from the cash reserve facility is just £2,000 with no admin charges for any additional drawdown taken.
A generous free unlimited valuation is offered along with a fixed equity release lifetime interest rate on the initial lump sum. Any further withdrawals would be at the interest rate applicable at the time of withdrawal.
As Legal & General are members of the Equity Release Council all their plans come with a no negative equity guarantee. Therefore, upon eventual sale of the property, any beneficiaries cannot be left with a debt to the equity release provider.
For joint applicants there is an added protection feature for the last survivor of the plan. Should one homeowner die or move into care, the surviving partner has the option to be able to repay this lifetime mortgage within 3 years of this event with NO penalty.
This Legal and General Drawdown Mortgage enables any homeowner to spend their tax-free cash as they wish, with no need in having to make any repayments. However, one feature of the L&G plan is the Partial Repayment Option which allows the planholder to start making upto 10% repayments of the original amount borrowed each year with no penalty. This helps manage control the future balance of the lifetime mortgage UK scheme, either to reduce the roll-up effect of the interest, pay off the interest only or even reduce the future balance by using the full 10% allowance.
A further option for inclusion is the Inheritance Protection feature so the homeowner can secure a fixed percentage of the final sale value of the property. This is important for those who wish to guarantee a percentage of the house value from their inheritance.
A final option with the Flexible Lifetime Mortgage Plan is the opportunity to take a 2% cashback based on the amount taken. This does have the effect of increasing the equity release interest rate by 0.2%.
*L&G arrangement fee is an option. Selecting/deselecting will have a bearing on the interest rate offered.
**Interest rate is determined by location. Rate shown is situated outside London & the South East for illustrative purposes