Legal & General offers the most popular type of equity release, a lifetime mortgage. All Legal & General lifetime mortgages meet the Equity Release Council standards, which afford you their protections. Legal & General are a well-known brand and one of the largest equity release lenders in the market.
Let's review:
Legal & General offers variable live pricing, which means that it offers the best interest rate for the specific amount of money you need.
We typically find that Legal & General offers some of the most competitive equity release interest rates in the market. However, other lenders often provide more money at lower interest rates.
The interest rate available with Legal & General is based on:
- Your age(s)
- Your property address
- The amount of money that you need
- Whether you pay a product fee
- Whether you have a fixed or variable Early Repayment Charge structure
Please complete the equity release calculator below to find out your personalised interest rate. One of our experienced equity release advisors will request your personalised interest rate and compare it to other equity release plans across the market.
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Legal & General offers the most popular type of equity release plan, the lifetime mortgage. Their lifetime mortgages can be split into different sub-categories:
- Interest Roll Up Lifetime Mortgage: Allows clients aged 55 and over to release equity from their home without having to move or make any monthly payments.
- Optional Payment Lifetime Mortgage: Allows clients aged 55 and over to release equity from their home and pay some or all of the monthly interest by Direct Debit which will reduce the amount of interest that rolls up.
- Payment Term Lifetime Mortgage: Allows clients aged 50 and over to release equity from their home and pay all the interest each month for a chosen payment term, after which the interest rolls up. This may reduce the overall cost of the loan.
Legal & General also offers another later-life finance product, a Retirement Interest-Only (RIO) mortgage. These mortgages are similar to residential interest-only mortgages, but they do not have a fixed term.
Instead, you make the mandatory monthly payments until the end of the plan, when the last borrower passes away or moves into care. The capital is then repaid, usually from the sale proceeds of the property.
Let's explore some criteria and features in greater detail:
Interest Roll Up
lifetime mortgage |
Optional Payment
lifetime mortgage |
Payment Term
lifetime mortgage |
| Can apply if aged 55-90 |
Can apply if aged 50-90 |
| No affordability assessments |
The amount of money you can borrow is affordability assessed |
| Minimum property value £70,000 or £100,000 for flats, maisonettes, ex-council, ex-housing association or ex-Ministry of Defence properties |
| No maximum property value |
| Minimum loan £10,000 |
| No maximum loan amount |
| Add a cash reserve to access money later |
Lump sum only |
| Optional payments of up to 10% each year |
Optional payments of up to 10% each year can only be made once you have stopped making the monthly interest payments. |
| Downsizing protection |
| Free valuation on initial advance |
Useful features offered by Legal & General
Downsizing protection: With Legal & General lifetime mortgages, if the loan is repaid after five years because you move home and you cannot port your lifetime mortgage because your new home does not meet lending criteria, an Early Repayment Charge (ERC) is not applied.
Partial repayments: You can repay up to 10% of the loan amount each year without penalty. There is a minimum payment amount of £50 and you can make up to twelve payments. Your annual allowance is renewed on the anniversary of the date the borrowing completes. Any unused balance does not roll over into the following year.
Alternatively, service interest by Direct Debit. Instead of making voluntary payments, you could take an Optional Payment lifetime mortgage, which allows you to service the monthly interest by Direct Debit. If you keep up with your payments, you will not owe more than the initial money borrowed.
Inheritance protection: You can protect a percentage of your property value to leave a guaranteed inheritance in the future.
Legal & General's equity release underwriting
Flexible on construction: Legal & General are among the most flexible equity release lenders for non-standard construction properties.
Lease length: Legal & General will accept leasehold properties. The minimum leasehold tenure needs to have an unexpired term of at least 175 years minus the age of the youngest borrower.
Title split: If you are considering splitting your title with the land registry, Legal & General will consider allowing this to happen concurrently with the equity release application. The title split must happen concurrently with Legal & General releasing the equity release funds.
If you plan to split your title, you must show plans for the changes to the equity release surveyor to ensure that they value the correct land. Furthermore, the legal team will need to review the documents to ensure that there are no future land lock or rights of access issues.
Large estates: Legal & General is happy to consider large plots and high-value properties on an individual basis.
Free valuations: All Legal & General equity release plans offer free valuations on initial borrowing, regardless of the property's value.
I love this feature because it takes all the risk away from you. If there are any unforeseen issues with the survey, you will not have to pay anything upfront, and you will not be liable for paying a penny should you decide not to proceed.
Big brand: Legal & General is a household name with a strong reputation and a long trading history.
This can provide you with great peace of mind when taking a plan that could last the rest of your life!
The early repayment charges offered on Legal & General lifetime mortgages are some of the largest/longest in the market.
There are both Variable or Fixed Early Repayment Charge options.
Variable ERCs are capped at 25% of the amount borrowed and linked to movement in UK FTSE Actuaries 15 Year Yield (the Index).
Fixed ERCs are based on a percentage of the initial loan and the length of time that you have had the loan.
| Number of years |
Percentage of the initial loan to pay as an ERC |
| 1-5 |
9% |
| 6-8 |
8% |
| 9 |
7% |
| 10 |
6% |
| 11 |
5% |
| 12 |
4% |
| 13 |
3% |
| 14 |
2% |
| 15 |
1% |
| 16+ |
0% |
Legal & General is one of the most popular equity release lenders. Benefits of their plans include:
- Downsizing protection
- Inheritance protection
- Reserve facilities, and
- options to pay by Direct Debit.
However, you may be able to achieve larger loans and lower interest rates from other equity release lenders. Furthermore, Legal & General does not offer medically underwritten lifetime mortgages.
When you are ready, you can book an appointment with one of our equity release advisors, who can show you how Legal & General compares to other lenders for your specific needs.
If you have an existing equity release plan with Legal & General, we can help you assess the best way to borrow additional funds.
Where you have a reserve facility in place (from a drawdown plan), you can contact Legal & General directly on 03330 048444 to request additional funds.
However, I always suggest that you compare additional borrowing with Legal & General to the cost of moving to a different lender.
We will require your authority to discuss your existing plan with Legal & General. Please complete the form below so that we can send you a Letter of Authority to complete, sign, and return so that we may speak with Legal & General.
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Why don't I just go to Legal & General directly?
Of course, you can go to Legal & General directly to request their lifetime mortgages. However, you still require financial advice before taking one of their plans, and they do not currently have any directly employed advisors. Instead Legal & General will put you in touch with a financial advisor who will only advise on Legal & General equity release plans.
If you choose to work with an advisor who works with other lenders, you could be able to access a more suitable lifetime mortgage from another provider.
But won't I get a better deal by going direct?
The interest rates charged, and the amounts of money you can release will be the same regardless of if you go direct, or through another advice firm.
In closing
I hope that I have provided you with an understanding of Legal & General's equity release product offering. And hopefully, you have an idea whether you could be an Legal & General equity release client. If you have further questions surrounding Legal & General's equity release plans or would like to see if Legal & General is the plan I would recommend for you, contact us on 0207 158 0881.
Remember we compare plans from other equity release lenders too, so we can save you time shopping around, and find the most suitable plans for you. You can also use our equity release calculator to compare the lowest rate plans.
If you have further questions, why not speak with one of our qualified advisors?
Call us on 0207 158 0881 or use our online form to book your FREE consultation.
While a qualified equity release advisor has written this guide, it is not intended to be used as financial nor legal advice and should not be relied upon.
To understand the full features and risks of an Equity Release plan, ask for a personalised illustration.
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