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United Kingdom : Legal & General Home Finance and the Co-operative Bank Announce New Lifetime Mortgages Partnership as Equity Release Council Data Shows Market Growing 44% Year on Year.

Legal & General Home Finance (LGHF) has secured a five-year partnership agreement with The Co-operative Bank to offer its lifetime mortgages as an option for the Banks interest-only customers (aged 55 and over) who are approaching retirement.

Under the new agreement, The Co-operative Banks customers with interest-only mortgages will be introduced to LGHFs 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.

The agreement follows a successful partnership between LGHF and Santander in July 2016, which was the first of its kind for the industry and aimed to provide more certainty to interest-only mortgage holders whose loans are approaching maturity.

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, offering them an alternative option in terms of improving their financial situation.

The Co-operative Banks customers will be offered advice by The Retirement Lending Advisers (TRLA), who are part of Key Retirement Solutions and are equity release experts. 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 Banks interest-only customers will not be charged an advice fee and those that do decide to take out a lifetime mortgage wont pay any valuation or arrangement fees.

The lifetime mortgage market overall showed strong growth in the third quarter of 2017, with total sales of 823.6 million (Q3 2016: 570.7 million), a 44% year-on-year increase. For the market as a whole, sales in the first three quarters of 2017, at 2.22 billion, have already exceeded 2016 full year sales of 2.15 billion.

Legal & General entered the lifetime mortgage market in 2015 and has since become the largest lender in the sector.

For the first three quarters of 2017, Legal & Generals sales of lifetime mortgages were 715.1 million, and its market share was 32%.

It is estimated that people over the age of 55 in England hold 1.5 trillion of equity in their homes, yet only 17 billion of lifetime mortgages have been advanced, representing a significant opportunity for further growth in the lifetime mortgage market.

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Publication:Mena Report
Date:Nov 2, 2017
Words:441
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