L&G extends lifetime mortgage offers to 90 days

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L&G extends lifetime mortgage offers to 90 days
Brokers have been locking in interest rates for clients as a way of offering them insurance against the backdrop of an uncertain rate environment[Tolga Akmen / FT Commission]
ByRuby Hinchliffe

Legal and General (L&G) has extended its lifetime mortgage offer validity to 90 days following adviser feedback that it was too short.

Previously, the offer validity on these products was 50 days.

Many brokers have been locking in interest rates for clients as a way of offering them insurance against the backdrop of an uncertain rate environment.

L&G said it introduced the offer validity extension to give customers an added layer of reassurance and protection.

"Our new product enhancements provide greater peace of mind around the interest rate they will be able to secure on their lifetime mortgage," said chief executive of L&G's home finance arm, Craig Brown.

"Lifetime mortgages continue to be an effective modern financial planning tool. We want to help support advisers who play an increasingly important role in helping homeowners to understand if a lifetime mortgage is a suitable solution to support their financial planning."

Some in the adviser profession have shared their concerns around lifetime mortgages, otherwise referred to as 'equity release', following a probe into them by the Financial Conduct Authority.

Tenet managing director Helen Ball has called them "niche product[s] with niche features", making them "ripe for being mis-sold, whether deliberately or accidentally".

Amid these concerns, figures from the Equity Release Council showed the market has continued to grow to record levels.

Last year, equity release lending reached £6.2bn, a 29 per cent increase on 2021. Though the year did end on a cautious note for the market, with December marking the quietest year for the sector since before the pandemic.

L&G's home finance arm has also cut interest rates across its lifetime mortgage range by up to 0.30 percentage points.

Interest rates on lifetime mortgage products have taken longer to come down compared to residential mortgage rates.

While L&G's home finance website shows comparison tables with 6, 7 and 8 per cent rates, some residential rates are nearing 4 per cent.

Alongside a series of rate cuts, L&G has added two new products. 

Those over 55 will now have access to products with loan-to-values from 3.5 per cent.

L&G entered the lifetime mortgage market back in 2015.

Last year, the group's retail retirement and general insurance arms merged.

Before the merger, L&G had issued £848mn of lifetime mortgages and retirement interest only mortgages.

Protection also sits under this arm. Last month, L&G created a protection sales team after one adviser said the insurer’s service levels had dropped “significantly” over the past two to three years.

More recently, the group's chief executive Nigel Wilson announced his departure. 

Until a new boss is appointed, which L&G said could take "around a year", Wilson will remain in his post as CEO.