L&G launches sub-5% equity release product

L&G launches sub-5% equity release product

Legal & General is launching a new lifetime mortgage with what they say is a ‘market-leading’ 4.99 per cent annual rate.

The Premier Flexible drawdown product enables borrowers whose homes are worth more than £533,000 to release a portion of the wealth stored in their property, subject to a minimum loan amount of £200,000.

L&G gave an example of borrowers - a couple who are both age 77 with a property worth £5m - who release a lifetime mortgage of £1m from their home.

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 Total debt (years)

Legal & General Product

Start of Plan





Flexible @5.19% AER *






Premier Flexible @4.99% AER **






Debt Saving for








In terms of rolled-up interest, the provider stated these borrowers will be better off (when compared with L&G’s Flexible Lifetime Mortgage) immediately when the loan completes.

Indeed, after 15 years, Legal & General stated this would amount to a substantial saving of more than £70,000 in interest owed.

Nigel Waterson, chairman of the Equity Release Council, called this type of development “a genuine game-changer” for the sector.

He said: “Product innovation of this sort – together with the industry standards – will further mainstream equity release in 55 plus financial planning.”

Dean Mirfin, director at Key Retirement, said: “The introduction of a rate of 4.99 per cent, for those looking to release more significant levels of equity from their homes, is great news for advisers and their clients.”

Earlier this month, L&G announced that its equity release lending reached £201m in 2015, with £99m of lending in its fourth quarter of last year.

In April 2015, the group acquired New Life Home Finance and rebranded it as Legal & General Home Finance, launching an extended product range and enhancing operational capability to deliver higher volumes.