L&G cuts lifetime mortgage rates

Legal & General has cut interest rates on its lifetime mortgage products.

The move also brings its Flexible Lifetime product below 5 per cent annual equivalent rate (AER) for the first time, with a new rate of 4.99 per cent for customers who are interested in a drawdown product to help fund retirement.

In mid-February, Legal & General launched the Premier Flexible product with a 4.99 per cent annual rate, targeting equity release borrowers whose homes are worth more than £533,000 – subject to a minimum loan amount of £200,000.

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This week Legal & General also increased loan-to-value (LTV) ratios for its Premier Flexible product by 2 per cent at all ages, for qualifying lifetime mortgage customers.

Flexible lifetime mortgage rate reductions


Legal & General Product

Previous AER

Reduced AER

Premier Flexible






Flexible with 2% Cashback




All the provider’s lifetime mortgages offer optional partial repayment, allowing customers to repay up to 10 per cent of the amount borrowed each year without any early repayment charges.

Legal & General’s products are also not subject to affordability assessments.

Adviser view

Simon Chalk, technical manager for equity release at Age Partnership, said Legal & General set a new record low for a genuine rolled-up interest lifetime mortgage with these reduced rates.

He added: “To think that a young 60-year-old homeowner can now borrow for what might be 25 to 30 years or more, fixed at a sub 5 per cent rate is staggering.

“The value inherent in the market today serves to answer the critics when they claim that equity release is expensive.”