Legal & General has signed a five-year agreement to offer lifetime mortgages to Santander customers.
The arrangement will help existing Santander mortgage customers reaching the end of their mortgage term, who may have a shortfall in repaying the capital owing on interest-only mortgages.
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.
Whether customers take out a lifetime mortgage or not, no separate advice fee will be charged for making use of this service.
Additionally, for those customers who choose the lifetime mortgage option, no valuation or arrangement fee will be charged.
Miguel Sard, managing director within the mortgage division at Santander UK, said: “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.”
Legal & General Home Finance came out of the acquisition of New Life Home Finance in April 2015, and to date the rebranded firm has completed over £400m of lifetime mortgage lending to thousands of retirees.
Bernie Hickman, chief executive of Legal & General Home Finance, said: “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,” he added.
Advice will be provided by Key Retirement, which already provides lifetime mortgage advice to L&G customers.
Nigel Waterson, chairman of the Equity Release Council, commented: “Appetite from high street lenders to offer lifetime mortgages to their customers shows these products have a crucial role to play in mainstream financial planning for retirement.”
peter.walker@ft.com
