Press releases

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 Bank’s interest-only customers (aged 55 and over) who are approaching retirement.

2 Nov 2017

Lifetime Mortgages TV Advert

Interest only customers of The Co-operative Bank will be introduced to Legal & General Home Finance’s award winning range of lifetime mortgages

New partnership follows Legal & General Home Finance’s entry into the Bank/Building Society Interest Only solution sector in July 2016

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.

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 Bank’s 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 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.

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 & General’s 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.

Steve Ellis, Managing Director, 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 Marketing 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.”

Will Hale, Chief Executive of Key Retirement said:

“Key Retirement is delighted to be working alongside Legal & General Home Finance in providing equity release solutions for Co-operative Bank customers with maturing interest-only mortgages.

“Over the last 12 months we have seen a significant increase in customers approaching us to look at solutions for re-paying maturing interest-only mortgages and we expect this trend to continue. It’s encouraging to see major lenders such as The Co-operative Bank recognise the importance of specialist advice in this area and be proactive in helping their customers explore the options available to them.

“As the acknowledged market leading adviser with over 19 years’ experience specialising in this sector we are passionate about delivering consistently good outcomes for customers. Through providing this service we look forward to helping even more people to remain in their homes and to enjoy a retirement free of the pressures of ongoing mortgage repayments.”


* We charge interest on the total loan amount plus any interest already owed, and add this to the total amount that's secured against the customer’s home. Because they don't have to make any monthly payments the total owed grows quickly, reducing the equity left in their home and the value of any inheritance. The loan is usually repaid when the last remaining borrower passes away or moves out of their house into long-term care.

About Lifetime mortgages

A lifetime mortgage is a type of equity release which allows homeowners aged 55 and above to release some of their homes’ value as a tax-free cash lump sum, without having to sell their home or make monthly payments. They can use this money in a number of ways such as to pay off existing debt, home improvements, holidays or helping family members.

It is a loan secured against their home and it is repaid only when the last remaining borrower dies or moves into long-term care. There are no monthly payments but interest is charged on the total loan amount plus any interest already charged. This means that the amount owed grows quickly and reduces the equity left in the property.

A lifetime mortgage will reduce an inheritance and may affect entitlements to state benefits.   Repaying a loan early could mean substantial early repayment charges. If property values fall, that may affect the equity available to the client or their estate.  There may be cheaper ways to borrow money.

Legal & General Home Finance is a wholly owned subsidiary of Legal & General Group plc. Registered in England and Wales number 04896447. Registered office: One Coleman Street, London EC2R 5AA.

Legal & General Home Finance Limited is authorised and regulated by the Financial Conduct Authority.

Notes to editors

Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with £1.2 trillion in total assets under management (as at FY23) of which c40% (circa £0.5 trillion) is international.

We have a highly synergistic business model, which continues to drive strong returns. We are a leading international player in Institutional Retirement, in Retail Savings and Protection, and in both public and private markets through our Asset Management division. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.

As at 7 June 2024, we estimate the Group’s Solvency II coverage ratio to be 224%.

As at 11 June 2024, Legal & General has a market capitalisation of £14.6 billion.