Introducing our Payment Term Lifetime Mortgage

Our new Payment Term Lifetime Mortgage (PTLM) opens up possibilities for people in their early 50s.

It’s a type of equity release designed for people aged 50+. It gives them the chance to borrow against their home by paying off the interest for an agreed period. When payments stop, interest rolls up for the life of the loan.

It’s especially helpful for clients who can afford the interest payments of a mortgage while they’re working, but won’t be able to when they retire, or for clients who are already retired but don't want to commit to making payments for the whole mortgage term. 

 

PTLM is a loan secured against your client’s home and usually repaid from the sale of their property when they or the remaining applicant (if it’s a joint mortgage) dies or moves into long-term care.

They can choose how long they want to make payments for, if they are employed, this can be up to the date they’ve decided to retire or age 75, whichever comes first. Or, if they are already retired, this can be up to age 75. This means they may be able to borrow more than they could with other lifetime mortgages. The earliest they can stop interest payments is 55.

There’s a higher loan to value as well, because they're paying the interest off during the agreed period.

Because of the payment term, there’s an affordability assessment. This only looks at their current income, and no future income is taken into account, which means you’ll turn away fewer clients.

Payments are set for the payment term and your clients will need to keep these up in full and on time. As a last resort, their home may be repossessed if they do not keep up with payments.

Our Payment Term Lifetime Mortgage (PTLM) is for:

  • Clients aged 50 or over with at sustainable income.
  • Able to pass affordability assessments and make monthly interest payments for the duration of their payment term.
  • Living in or buying their own home, with a small or no mortgage,
  • Living in England, Wales or mainland Scotland, and own a home worth a minimum of £70,000 or £100,000 for flats, maisonettes, ex-council, ex-housing association or ex-Ministry of Defence properties.
  • Client's who have discussed the benefits and risks of a lifetime mortgage with their family and friends and they know: 
    • There may be cheaper ways to borrow money.
    • The impact on any inheritance.
    • Any unpaid interest is added to the amount they owe each month, which means the loan and outstanding interest grow quickly.
    • Repaying the loan early is likely to cause a significant early repayment charge.

Read our FAQs for more information

FAQs for PTLM

How can it help?

  • Could help your clients achieve their retirement ambitions. Some clients may use a lifetime mortgage for:
    • Repaying outstanding interest-only mortgages.
    • Home improvements.
    • Helping family - children and grandchildren.

It's important for your clients to understanding that by taking out a PTLM, it may:

  • Impact any inheritance.
  • They may need to make an Early Repayment Charge if they repay the loan early.
  • Your client will pay monthly interest payment until the end of their chosen payment term. As a last resort, their home may be repossessed if they do not keep up with payments.

Our Payment Term Lifetime Mortgage is for clients who want to borrow at least £10,000

Payment Term Lifetime Mortgage Product Summary PDF size: 117KB

You can use our lifetime mortgage calculator with your client to see how much they can release and show them the impact of interest and house price growth.

Use our calculator

Property eligibility

To apply for one of our Payment Term Lifetime Mortgages your client needs to meet our minimum eligibility criteria. Your client must be able to answer yes to the following questions:

  • Is their property made of traditional masonry construction, in a good state of repair, free of any tenancy restrictions, and is it in England, Wales or mainland Scotland?
  • Is their home valued at minimum of £70,000 or £100,000 for flats, maisonettes, ex-council, ex-housing association or ex-Ministry of Defence properties. 

Below is a list of some of the main reasons why the client’s application might have been declined based on their property:

  • The lease is too short yet the purpose of loan is to pay for a lease extension and this wasn't selected.
  • Their property is a bedsit.
  • Their flat is part freehold.
  • Their property has agricultural ties.

If your client has an age restricted property please refer to new business enquires team.

For more details please see the Later Life Mortgage Suitability Criteria PDFsize: 121KB

Applicant criteria

To apply for one of our Payment Term Lifetime Mortgage your client needs to meet our minimum eligibility criteria. Your client must be able to answer yes to the following questions:

  • Are they aged 50 or over?
  • Is one borrower in receipt of sustainable income?
  • Are they living in (or buying) their home and have either a small or no mortgage?
  • Do they want to borrow a minimum of £10,000?

Below is a list of some of the main reasons why your client's application might have been declined based on our applicant criteria:

  • Undischarged bankruptcy.
  • Applicant doesn't have indefinite rights to reside in the property.
  • The applicant has Charging Orders registered against them.
  • Property is held in Trust.

For more details please see the Later Life Mortgage Suitability Criteria PDFsize: 121KB

 

 

Quoting and online services

 

 

Key documents

 

 

Lifetime Mortgage calculator

Our Lifetime Mortgage calculator helps financial advisers to:

  • Show your clients how much they may be able to release from their home.
  • Demonstrate examples for both taking the maximum available as an initial advance or taking a smaller initial amount where the remainder can be drawn on in the future.
  • Illustrate the effect of our inheritance protection option on the total loan amount available.
  • Explore the impact of house price inflation.
  • Highlight how the interest on their loan increases over time.
  • Create a summary of your client's choices and possible results.

The calculator results are examples only. A lifetime mortgage is a loan secured on your client’s home. It will reduce the value of your client's estate but servicing the interest can slow or stop the growth of the loan over time and may affect their entitlement to means tested state benefits.

Our email PDF service for your illustration is unavailable. 

  

Energy Saver Cashback offer

Helping your clients

We’ll provide 10% cashback on the total cost of home energy efficiency improvements, up to £1,000 on an initial advance.

ESC offer blue

 

 

Events

At Legal & General, your development matters to us. We offer a series of CPD accredited events and workshops that support you in understanding the changing face of retirement.

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