Legal & General and Santander have agreed five-year deal to offer lifetime mortgages to Santander customers.
The partnership could help existing Santander mortgage customers that are reaching the end of their mortgage term who may have a shortfall in repaying the capital owing on their interest only mortgage. The service will also be available to existing Santander mortgage customers who are thinking about releasing equity from their homes to help fund their retirement.
The agreement with Santander aims to bring greater certainty to borrowers with endowment policy shortfalls or those who would rather not sell and downsize. A lifetime mortgage from Legal & General Home Finance will now be one of the options offered, where appropriate, to Santander mortgage customers who are facing repayment shortfalls.
Whether customers take out a lifetime mortgage or not, no separate advice fee will be charged for making use of this service. For those customers who decide that a lifetime mortgage is right for them, no valuation or arrangement fee will be charged.
Miguel Sard, managing director of Santander’s UK mortgage division, said: “Since joining the lifetime mortgage market, Legal & General has shown commitment to developing solutions that enable cost effective ways of borrowing into retirement.
“This new partnership promotes flexibility and choice for existing, interest only customers who are approaching retirement and want to find a mortgage solution that suits both their lifestyle and their financial position.”
Bernie Hickman, CEO of Legal & General Home Finance, added: “This is a really positive move for the retirement lending market that will see more customers realising the benefits of releasing equity to make their retirement better. We are particularly excited about this new partnership, which builds on Legal & General’s long-standing relationship with Santander and we are delighted that they have chosen us as their partner.
“Thousands of borrowers need to find a way to pay back the capital on their interest-only mortgage when their term ends and often, if they are retired, they don’t have the income to support the mortgage repayments required to do this. Legal & General is confident that our lifetime mortgages can play a crucial role in tackling what is a UK wide problem, broadening the range of options that are available to interest-only customers as they reach retirement.”
Advice will be provided by Key Retirement, which also provides lifetime mortgage advice to Legal & General’s own customers.
Colin Taylor, chief executive of Key Retirement, said: “Key Retirement are delighted to be working alongside Legal & General in providing equity release solutions for Santander customers with maturing interest only mortgages. Equity release can be the ideal solution for many people who are not ready to downsize and also want more financial flexibility in later-life. However, specialist advice in this area is vital to ensure consistently good outcomes for customers.
“As the acknowledged market-leader with over 18 years’ experience specialising in this market, we look forward to helping Santander customers to remain in their homes and to enjoy a retirement free of the pressures of ongoing mortgage repayments.”