For those in later life, tapping into the value of their home through equity release is an increasingly popular way to boost their finances. Legal & General, a major player in the UK's financial services market, is a prominent provider of these products. This article offers a detailed look at Legal & General's equity release offerings, helping you to decide if they're the right fit for your retirement plans.
If you would like independent advice about whether L&G is the right provider for you, make an enquiry below and one of our equity release specialists will shed light on this.
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Who is Legal & General?
Founded in 1836, Legal & General is a leading UK financial services company. They offer a wide range of products, including insurance, investments, and retirement solutions. In the equity release market, they are one of the largest providers of lifetime mortgages, and they are a member of the Equity Release Council, which means their products meet a high standard of consumer protection.
What is Legal & General Equity Release?
Legal & General specialises in lifetime mortgages, which are the most common type of equity release. This is a loan secured against your home that allows you to release tax-free cash without having to move. The loan, plus any rolled-up interest, is repaid when you die or move into permanent long-term care.
Legal & General offers a range of lifetime mortgages to suit different needs:
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Interest Roll-Up Lifetime Mortgage: With this option, you don't make any monthly repayments. The interest is added to the loan each month and the total amount is repaid when the plan ends.
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Optional Payment Lifetime Mortgage: This plan gives you the flexibility to pay some or all of the monthly interest, which can reduce the overall cost of the loan.
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Payment Term Lifetime Mortgage: For those aged 50 and over, this mortgage allows you to pay all the interest each month for a set term. After the term ends, the interest then rolls up.
Key Features of Legal & General Equity Release
Legal & General's lifetime mortgages come with several important features:
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No Negative Equity Guarantee: You will never owe more than the value of your home.
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Inheritance Protection: You can choose to protect a percentage of your home's value to leave as an inheritance.
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Downsizing Protection: If you move to a new property, you may be able to repay your loan without an early repayment charge.
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Free Valuation: Legal & General offers a free valuation of your property as part of the application process.
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Flexible Repayments: You can make voluntary repayments of up to 10% of the initial loan amount each year without penalty.
Legal & General Equity Release Interest Rates
Legal & General's interest rates are competitive and are fixed for the life of the loan. The rate you are offered will depend on your age, the value of your property, and the amount you want to release. It is essential to get a personalised quote for the most up-to-date information.
Eligibility Criteria
To be eligible for a Legal & General lifetime mortgage, you must meet the following criteria:
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You must be 55 or over (or 50 for the Payment Term Lifetime Mortgage).
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You must be a UK homeowner, with your property in England, Scotland, or Wales.
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Your property must be your main residence and be worth at least £70,000 (£100,000 for flats, maisonettes, or ex-council properties).
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The minimum amount you can release is £10,000.
Legal & General Equity Release Reviews
Legal & General generally receives positive reviews for their equity release products. Customers often praise their competitive interest rates, the flexibility of their plans, and the clarity of the information provided. However, as with any financial product, it is important to read a range of reviews and seek independent financial advice before making a decision.
Pros and Cons of Legal & General Equity Release
Pros:
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Access to Tax-Free Cash: Provides a lump sum or regular income to spend as you wish.
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Stay in Your Home: You can continue to live in your home for as long as you choose.
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Flexible Options: A choice of plans to suit your individual circumstances.
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Reputable Company: A well-known and trusted provider in the UK financial services industry.
Cons:
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Interest Accumulates: The compound interest can significantly increase the amount you owe over time.
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Reduced Inheritance: The value of your estate will be reduced, leaving less for your beneficiaries.
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Impact on Benefits: Receiving a lump sum of cash could affect your entitlement to means-tested state benefits.
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Early Repayment Charges: If you want to repay the loan early, you may face significant charges.
How to Apply for Legal & General Equity Release
You can only take out a Legal & General lifetime mortgage through a qualified financial adviser. They will discuss your needs and circumstances, explain the risks and benefits, and help you decide if equity release is the right option for you. The application process typically takes around eight to twelve weeks, from the initial consultation to receiving your funds.
Get in touch here to take advantage of a free, no-obligation chat with an equity release adviser who specialises in L&G’s product range today.