Legal & General has announced ambitious plans to become a leading provider of lifetime mortgages.
The insurer has launched its own-branded Lifetime Mortgage product range, which it claims offers market-leading interest rates and features.
This follows the acquisition of specialist equity release provider Newlife in April 2015.
It expects lending to exceed £100 million in 2015 with a significant increase in 2016 due to its competitive rates, flexible products and excellent service.
L&G said the lifetime mortgage market has grown strongly recently and it expects more consumers to unlock the equity tied up in their homes.
Growing life expectancy, the cost of care and rising property values should all drive growth, it said.
Bernie Hickman, managing director, individual retirement at Legal & General, said:
“The launch of Legal & General Lifetime Mortgages marks an important and significant point in the evolution of our retirement business.
“The market is growing and we want to be known as a brand that helps more and more people release the money tied up in their property."
The equity release market grew by 29% in 2014 and the lifetime mortgage market is forecast to grow to over £2.3 billion by 2019.
Over 60s own nearly £1.3 trillion of housing equity.
Will Hale, business director at Key Retirement Solutions, welcomed the move: “It’s early days but so far we have been impressed with both L&G's offering and its commitment to bringing a range of new products to the market coupled with a service proposition that will make life easier for both us and our clients.”
Nigel Waterson, chairman of the Equity Release Council, said L&G’s announcement is another important milestone for equity release. “Its arrival will help to build on the strong momentum already in the market, which has seen a surge of lending and innovation in recent years.”
Andrea Rozario, chief corporate officer at Bower Retirement Services, welcomed L&G’s focus on innovation with talk of new products including a five-year fixed rate interest-only deal.
“This will help the 120,000-plus over-65s estimated to be coming to the end of interest-only deals by 2020.
“Combined with the news that Retirement Advantage has had to pull deals because of strong demand it underlines the pace of expansion in the market.
“Advisers need to ensure they can meet the demand and that they are committed to maintaining high standards of service.”