Legal & General inks lifetime mortgage deal with Virgin Money

Aug 6 (Reuters) - British insurer Legal & General (LSE: LGEN.L - news) said on Monday it has teamed up with Virgin Money to offer lifetime mortgages to Virgin customers at the end of their interest-only home loan term.

Under the five-year deal, Virgin Money customers aged over 55 with interest-only mortgages will be eligible to apply for the loans.

Regulators told Britain's banks earlier this year to step up checks on 1.7 million customers with interest-only home loans as in many cases these customers have no clear plan for repaying capital.

"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," Steve Ellis, CEO, Legal & General Home Finance, said.

Lifetime mortgages pay a fixed income against the value of a property, which is typically handed over as payment on the customer's death.

Legal & General, one of the biggest players in the market, already has lifetime mortgage partnerships with Santander and The Co-operative Bank, it said.

(Reporting by Noor Zainab Hussain in Bengaluru; editing by Carolyn Cohn and Susan Fenton)