Wondering whether your bank offers equity release? Santander may not provide these products directly, but they may still be able to help you access the value tied up in your home.

In this article, we’ll explore how equity release works and what its benefits and drawbacks are, introduce Santander, and discuss how the bank supports retirees interested in equity release.

COMMENT: TimeBank is an independent third-party data provider, and the information shared here reflects their views alone, not necessarily those of Santander. This article is for informational purposes only and should not be considered financial advice or a recommendation to engage with any products offered by Santander.

What Is Equity Release, and How Does It Work?

Equity release allows homeowners of 55 and older to access the value tied up in their property while retaining the right to live in their homes.

How Does Equity Release Work?

Equity release allows you to access the value tied up in your home as cash without requiring you to sell or move out.

You can receive a lump sum, smaller drawdowns, or both while still living in your home. 

You can choose between a lifetime mortgage, where you borrow against the value of your home and continue to own it, or a home reversion plan, where you sell part or all of your home while retaining the right to live there.

What Are the Benefits of Equity Release?

The benefits of equity release include gaining access to funds that can improve your standard of living in retirement. 

Other benefits include:

• Access to Funds: Unlock tax-free cash tied up in your property.
• No Monthly Repayments: Repayment is typically deferred until you sell or pass away.
• Remain in Your Home: Continue living in your property while accessing its value.
• Fixed Interest Rates: Most plans offer predictable costs with fixed rates.
• Flexible Plans: Options like drawdown or voluntary repayments reduce costs.

When considering the benefits, it’s important to weigh the potential drawbacks, too.

What Are the Drawbacks to Equity Release?

Drawbacks to equity release include the fact that it may limit your future borrowing options.

Other cons are:

• High Interest Costs: Compound interest can significantly increase the amount owed.
• Reduced Inheritance: Less value left for your beneficiaries.
• Early Repayment Charges: Penalties can apply if you repay early.
• Impact on Benefits: May affect eligibility for means-tested benefits.
• Maintenance Responsibility: You must keep the property in good condition.

Who Is Santander?

Santander is a global banking group offering a wide range of financial services, including personal banking, mortgages, and investments.

What Services Does Santander Offer?

Santander offers various financial services, including personal and commercial banking, loans, mortgages, and wealth management. 

Their comprehensive offerings cater to the diverse needs of individuals, businesses, and large corporations, providing solutions from everyday banking to significant financial planning.

How Can Santander Support Retirees? 

Santander supports retirees by offering products and services tailored to the needs of older adults, such as retirement accounts, wealth management advice, and mortgage products adapted for later life. 

Their focus on providing financial security and advice helps retirees manage their finances effectively during retirement.

What Is Santander’s Connection to Equity Release?

Santander does not directly offer equity release products.

However, they provide access to equity release through a partnership with Legal & General.¹

This partnership allows Santander to offer later-life lending solutions, such as lifetime mortgages, which enable homeowners to release equity from their homes.

There’s more

Santander provides financial planning services and mortgage options that can serve similar needs, helping retirees access the wealth tied up in their homes.

What Equity Release Product Is Available Through Santander?

Santander offers equity release products through a partnership with Legal & General.

The primary product available is the Lifetime Mortgage, which allows homeowners aged 55 and over to release tax-free cash from their home without the need to move out.

This product can be taken as a lump sum or a series of lump sums, and the loan is repaid when the last borrower dies or moves into long-term care

Who Qualifies For This Lifetime Mortgage?

To qualify for the Lifetime Mortgage offered through Santander in partnership with Legal & General, you generally need to meet certain standard criteria.

These are:

• Age: You must be at least 55 years old.
• Property Value: Your home will need to meet minimum valuation criteria, usually £70,000.
• Residency: The property must be your primary residence and located in the UK (but not in Northern Ireland).²
• Property Type: The property should be of standard construction and in good condition.

How Will This Equity Release Product Affect Your Retirement Finances?

This equity release product will affect your retirement finances by reducing the equity in your home, which may impact the value of your estate and the inheritance you can leave to your beneficiaries.

Interest will accrue on the amount borrowed, which could grow significantly over time, reducing the remaining equity further.

Additionally, depending on the terms, accessing this product could influence your eligibility for means-tested benefits or other financial support.

On the positive side

By unlocking equity from your home, this equity release product can provide a lump sum or access to smaller withdrawals, which may enhance your financial flexibility and improve your quality of life in retirement.

This could help cover essential expenses, support lifestyle goals, or assist with unexpected costs.

Additionally, it may allow you to preserve other investments or savings, offering a tailored financial solution for your retirement needs.

However, the benefits should be carefully weighed against the long-term costs and potential impact on your estate.

It’s essential to fully understand the costs, fees, and long-term implications before proceeding, and to seek specialist advice to ensure this product aligns with your financial goals.

Applying for a Lifetime Mortgage Through Santander and Legal & General

Applying for a lifetime mortgage through Santander and Legal & General involves a few simple steps.

These include checking your eligibility, receiving advice, receiving an offer, and getting access to your funds.

Step 1: Eligibility Check

Santander will confirm your eligibility and, if you are eligible, refer you to Legal & General.

A meeting with a specialist adviser will be arranged at your convenience, and you’re welcome to include family or friends.

The adviser will assess your needs and recommend a suitable mortgage.

Step 2: Receive Advice

Legal & General’s adviser will explain their recommendation, including associated fees and costs, such as legal fees.

Some lifetime mortgages may have application fees, which your adviser will detail.

And the cost?

The advice you receive is free and you’re under no obligation to proceed.

Santander receives a capped commission from Legal & General only if your mortgage completes, but this doesn’t affect your costs.

Step 3: Mortgage Offer

If you proceed, Legal & General will arrange a valuation of your home.

You’ll need a qualified solicitor to handle the legal aspects; Legal & General can provide a list if required.

Once the valuation and checks are complete, an offer will be sent to you and your solicitor.

Important

You must receive legal advice before signing.

Step 4: Funds Release

A completion date will be set, and Legal & General will release the funds to your solicitor.

Your solicitor will clear any existing debts or mortgages on your home.

Typically, it takes 8 to 10 weeks from application to receiving the money, although this may vary.

What Documents and Information Will You Need?

When preparing for your equity release application, you will need to gather several important documents and pieces of information. 

These include proof of your identity, proof of property ownership, recent statements of any outstanding mortgage or loans, and details of your current financial situation, such as income, expenses, and debts. 

Additionally, having an up-to-date appraisal of your property’s value will be crucial for determining how much you can release.

Common Questions

Conclusion

While Santander currently does not offer equity release products directly, those interested in this financial option can explore the lifetime mortgages offered through the bank’s partnership with Legal & General. 

These lifetime mortgages can provide the necessary funds for retirees looking to enhance their income or manage large expenses.

Despite the fact that the bank does not directly provide equity release, Santander clients can explore this option by asking to be put in touch with one of Legal & General’s dedicated advisors.