In this brief guide, we will cover if Santander offers lifetime mortgages and where you can obtain a Santander lifetime mortgage.
A lifetime mortgage as the name implies is a mortgage you get for the rest of your life. Lifetime mortgages]() are a type of equity release product.
Lifetime mortgages work by allowing you to release all or some of the equity in your property. If you choose to make monthly mortgage repayments on your lifetime mortgage then you will have to go through themortgage affordability assessments to determine if you can actually keep up those monthly mortgage repayments.
Lifetime mortgages do not usually have affordability assessments and whether you are eligible for the mortgage will depend mostly on your age, the properties value, and your personal circumstances.
The lifetime mortgage is repaid when you die, move into a care home or choose to sell the property.
Lifetime mortgages can either have the interest rolled up and repaid at the end of the lifetime mortgage term or repaid monthly with a standard mortgage.
The monthly mortgage repayments will only constitute of the interest being charged on the balance owed.
You can ringfence some equity to leave in your inheritance to your family members.
Most equity release providers will be part of the equity release council and will have a no negative equity guarantee which means you will never owe more than the value of your property.
Santander lifetime mortgages do not exist but what you hear being marketed as Santander lifetime mortgages is simply a partnership between Santander Bank and Legal & General to provide an alternative repayment solution for borrowers who have santander interest-only mortgage.
The arrangement Santander entered into was primarily for borrowers who were over 60 and looking to release equity from their homes.
If you are struggling to repay your Santander mortgage and you are over 60 then you may be offered the Santander lifetime mortgage as an alternative.
Santander customers who inquire about the Santander lifetime mortgage will be advised by key retirement but not charged any advise fee, valuation fee or arrangement fee.
Key retirement is the entity which Legal & General use to offer advice on their lifetime mortgages and the so-called “Santander lifetime mortgages”. Key retiremnt will provide you advice on the Santander lifetime mortgage through the Retirement Lending Advisers which they operate.
Legal and General provide equity release scheme products which are usually open to anyone over the age of 55. The only difference with Santander lifetime mortgage is the terms will differ, as will the advisory fees, depending on if you get it through Legal & General or a different advisory firm.
You may consider the Santander lifetime mortgage as you may find it a good option when you want to repay your interest-only mortgage.
If you are a Santander interest-only mortgage borrower then using a Santander lifetime mortgage may not be your only choice and you may be able to get better mortgage rates by comparing the whole of the mortgage market.
The Santander lifetime mortgage is really the Lifetime Mortgage from Legal and General, in partnership with Santander and this mortgage must be used to pay off an existing Santander mortgage.
This may include any early repayment charges, where applicable.
If you get a santander lifetime mortgage then your current interest-only Santander mortgage will be paid off by the Lifetime mortgage from Legal and General and you will become a legal and general customer with a lifetime mortgage.
The legal and Generallifetime mortgage balance will be repaid in full when you die, move int a care home or if you choose to sell the home.
The interest charged on your Legal and General lifetime mortgage (aka the Santander lifetime mortgage) can be charged in one of two ways:
The flexible lifetime mortgage option allows you to not have any interest payments being paid monthly or at the beginning of the mortgage but rather the interest is rolled up and repaid at the end of the mortgage term upon your death, when you move into a care home or sell the home. This is the same time the balance is paid. The balance on a lifetime mortgage is usually paid when the equity release lender sells the home when either event mentioned above happens.
The option payment lifetime mortgage offered by Legal & General and commonly identified as the Santander lifetime mortgage allows you to make monthly mortgage repayments but up to a maximum limit. These monthly mortgage repayments go towards the interest owed on the mortgage.
Eligibility for the Santander lifetime mortgage (aka the lifetime Legal & General mortgage)
To be eligible for the Santander lifetime mortgage (aka the lifetime Legal & General mortgage) you may need to meet the below requirements:
You will usually have to be at least 55 years old
You will need to have a property valued at £100k
If your property is an ex housing association, ministry of defence property or an ex-council house then it may need to be valued at £150k at the very minimum.
The property must be built on standard construction. Non-standard construction properties may not be accepted.
The property may need to be well maintained.
The Santander lifetime mortgage (aka the lifetime Legal & General mortgage) must be used to repay an existing mortgage including any early repayment mortgage fees.
What you need to know about the Santander lifetime mortgage (aka the lifetime Legal & General mortgage)
The Legal and General lifetime mortgage allows you to release equity from your homes in two different ways.
You can either:
Take a fixed lump sum
With a fixed lump sum you essentially take a fixed lump sum and can always go back and take further amounts. Interest is only charged on the amount of money you have taken out (the amount of equity you have released).
Take a regular drawdown
With a regular drawdown, you can take a regular amount each month or each year. Interest is only charged on the amount you have taken out.
As an example, if you were approved for a £150,000 lifetime mortgage, and took out £50,000, leaving £100,000 on reserve, the interest would be payable on the £50,000 and not the whole £150,000.
With the Santander lifetime mortgage aka the Lifetime Legal & General mortgage, you will remain the legal homeowner but will need to stick to the terms of your equity release agreement with the lender.
The interest charged on the Santander lifetime mortgage is compound interest this means that interest is being charged in interest and this tends to rack up very fast.
The Santander lifetime mortgage may be a good option if you are approaching the end of your interest-only mortgage and you are struggling to find a repayment vehicle or your current repayment vehicle is underperforming.
Use a mortgage broker for your mortgage in principle
You may want to use an independent mortgage broker to help you get a mortgage on your new home.
Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.
This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.
A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.
After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle.
This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application.
Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.
This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.
It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.
If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.
Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.
They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.
This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.