Legal & General has launched the market’s first sub 5% equity release mortgage.
Legal & General has launched the market’s first sub 5% equity release mortgage.
The product, called ‘premier flexible’, is a drawdown lifetime mortgage that enables people with homes worth more than £533,000 to release a minimum loan of £200,000.
The product has a £4,999 arrangement fee which can be added to the loan and comes with 1% cashback.
Bernie Hickman, managing director, individual retirement at Legal & General, said: “The introduction of premier flexible lifetime mortgage to the Legal & General range brings the lowest interest rate below the psychologically important 5% level for the first time and, as such marks an important milestone in our commitment to growing the retirement lending market in the UK.”
Nigel Waterson, chairman of the Equity Release Council, said: “Legal & General is developing lifetime mortgage offerings at below 5% interest rate and this type of development could be a genuine game-changer for our sector.
“Product innovation of this sort – together with the industry standards - will further mainstream equity release in 55+ financial planning."
Below is Legal & General's example of the product in action. Theborrowers are a couple who are both 77 with a property worth £5m with a £1m lifetime mortgage.
