A spokesperson linked to the retirement lender told Mortgage Solutions this is its third partnership in a year, after the deals with Santander and The Co-Operative Bank with potentially more to come as part of its growth plans. Legal and General will shortly be able to make its range of lifetime mortgages directly available to 20% of the UK’s interest-only mortgage customers.
Virgin Money’s customers with interest-only mortgages will be introduced to Legal and General’s advised lifetime mortgage products as they approach the end of their loan term. This includes customers who would like to consider their options to pay off the outstanding capital of their interest-only loan, as well as individuals who might be interested in accessing their property wealth to improve their quality of life in retirement.
Optional Payment Lifetime Mortgage
A key offering to Virgin Money customers will be Legal and General’s Optional Payment Lifetime Mortgage, launched in April and developed for interest-only customers.
Customers do not need to pass any affordability assessments or have a capital repayment strategy in place, as the amount owed is repaid from the sale of the property upon death or moving out of the home into long-term care. In the event that they can no longer afford or want to pay their monthly interest repayments, the customer can choose to stop and instead the interest is added to the loan each month.
The Optional Payment Lifetime Mortgage allows customers to pay some or all of the monthly interest, but also stop paying at any time.
As with other lifetime mortgage products, the interest rate on Legal and General’s OPLM product is fixed for life, which provides customers with long-term certainty that their monthly payments will never increase. The product is available via intermediaries and on an advised basis.
This product is part of Legal and General’s commitment to innovation in the retirement lending market, it said. OPLM has also been designed to respond to the FCA’s request for the market to offer more choices for customers wanting to borrow in retirement.
Steve Ellis, CEO of Legal and General Home Finance, said: “Solving the interest-only challenge is just one area where we see lifetime mortgages as a potentially transformative solution for the lives of UK borrowers. Britain’s over-55s are currently sitting on over £1trn of property wealth – what could that money do for retirement outcomes, our housing market, and even our economy?
“Lifetime mortgages are already having a hugely positive impact on our society, and at Legal & General we are committed to raising awareness about the transformative effect these products could have for many of Britain’s retirees.
“Virgin Money shares our vision for customer focused innovation, so we’re delighted to announce our new partnership and offer our retirement lending products to an even wider audience of people looking for flexible later life lending solutions.”
Andrew Asaam, director of mortgages at Virgin Money, said: “We’re delighted to partner with Legal and General to offer choice and peace of mind to a number of our interest only end of term customers. Their Lifetime Mortgage range provides excellent options to help customers manage their finances effectively, including individuals who might be interested in accessing their property wealth to improve their standard of living in later life.”