Through the partnership with Legal and General, Santander hopes to bring greater certainty to borrowers with endowment policy shortfalls or customers who would prefer to stay in their home rather than downsize in retirement.
Last year Mortgage Solutions revealed that Santander planned to provide a range of solutions to its back book interest-only customers by early 2016.
Key Retirement will provide lifetime mortgage advice to Santander’s customers, with no separate advice fee charged whether clients make use of the service or not. No valuation or arrangement fee will be charged to Santander customers that opt for a lifetime mortgage.
Miguel Sard (pictured), managing director mortgage division at Santander UK, said: “Since joining the lifetime mortgage market, Legal & General has shown commitment to developing solutions that enable cost effective ways of borrowing into retirement. 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 and General entered the retirement lending market last year and have so far completed over £400m of lifetime mortgage deals.
The provider has spoken out on its intention to launch a hybrid mortgage deal, which combines the features of a standard residential mortgage with elements of a lifetime mortgage. It is also eyeing the introduction of a lifetime deal for older landlords.
Bernie Hickman, CEO, Legal & General Home Finance, said its tie-up with Santander would promote and boost awareness of the benefits of using lifetime mortgages to improve living standards in retirement.
“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,” he added.
“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.”