Legal & General Home Finance (LGHF) has agreed a five-year deal with the Co-operative Bank to offer its lifetime mortgages as an option for the bank’s interest-only customers, aged 55 and over, who are approaching retirement.
Under the new agreement, the Co-operative Bank’s customers with interest-only mortgages will be introduced to LGHF’s advised lifetime mortgage products. The lifetime mortgages will be offered as another option to help borrowers who are facing difficulty paying off the outstanding capital from their interest-only mortgage or keeping up with mortgage repayments in retirement, but will also be available to other customers who might be interested in improving their retirement by releasing equity from their home.
By choosing to take out a Legal & General Lifetime Mortgage and using the product to pay off their interest-only mortgage debt, Co-operative Bank customers will no longer have to pay any monthly interest payments.
The Co-operative Bank’s customers will be offered advice by The Retirement Lending Advisers (TRLA), who are part of Key Retirement Solutions. TRLA can only give advice on Legal & General Lifetime Mortgages. If the products Legal & General offer are not suitable, the customer will instead be referred to Key Retirement Solutions’ whole of market service.
The Co-operative Bank’s interest-only customers will not be charged an advice fee and those that do decide to take out a lifetime mortgage won’t pay any valuation or arrangement fees.
Steve Ellis, managing director of Legal & General Home Finance, said: “I am delighted to announce this new partnership with The Co-operative Bank, which follows last year’s pioneering agreement with Santander. We were incredibly proud to be the first lender to secure an agreement of this type, but we always intended to launch further partnerships like this to enable more people to benefit from the positive impact releasing equity can have on retirement.
“Accessing property wealth for later life is a concept that is rapidly growing in popularity amongst Britain’s over-55s as the latest report from the Equity Release Council demonstrates. This latest partnership reiterates just one of the ways we wish to meet the rising demand from consumers for lifetime mortgages.
“There are still a significant number of borrowers who have not set aside the necessary funds to repay the outstanding capital once their interest-only mortgage matures, and a lifetime mortgage could be one solution for these individuals. With two of these partnerships now under our belt, Legal & General Home Finance will continue to explore the possibility of more agreements of this type, to help these borrowers to manage their interest-only mortgage and get the most out of later life.”
Matthew Carter, director of products and communications at the Co-operative Bank UK, said: “Since joining the lifetime mortgage market, Legal & General Home Finance has shown a strong commitment to developing flexible solutions that enable cost effective ways of borrowing in retirement, which has seen them become the market leader. This new agreement is the next step in The Co-operative Bank’s developments in providing an alternative and sustainable option for our interest–only, end-of-term customers who are approaching or who are in retirement.
“We look forward to working with Legal & General Home Finance to help more of our customers create a better, more secure, retirement, through increasingly effective ways of managing their finances in later life.”