About The Co-operative Bank
The Co-operative Bank was founded in 1872 on the principles of the co-operative movement and values and is one of the first ethical banks in the UK. The bank launched a customer-led ethical policy in 1992 and today this policy prioritises a commitment to the planet, people and community. Values and ethics are at the heart of The Co-operative Bank which was rated the best Environmental, Social and Governance (ESG) bank in the UK in 2021 and 2022.
The Co-operative Bank's mortgage arm was previously known as Platform - an intermediary-only lender. It came into being in February 2003, when Britannia Building Society subsidiaries Platform Home Loans and Verso merged, before becoming part of the Co-operative Bank in 2009. The Co-operative Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority - No. 121885.
It aims to set itself apart from its competitors by taking an ethical approach to mortgage lending, working with organisations such as homelessness charity Centrepoint in order to give something back to society.
Mortgage customers can apply to The Co-operative Bank directly as well as through a mortgage professional to access The Co-operative Bank for intermediaries mortgages. It was named Best Charity Banking Provider 2023 and Most Trusted Mainstream Bank 2019 by Moneyfacts.
The Co-operative Bank's key features
- Mortgages for first-time buyers, movers and those remortgaging
- Residential and buy-to-let products
- Professional mortgages with up to 6 times income multiples
- Ability to overpay by 10% per year without paying an early repayment charge
- 40-year maximum mortgage term
- Minimum mortgage loan amount is £25,001 for both residential and buy-to-let
- Maximum mortgage loan amount is £2,000,000 for residential and £750,000 for buy-to-let
The Co-operative Bank pros and cons
| Pros | Cons |
 Socially conscious mortgage lender, which donates money to charity for each mortgage deal
Up to 6 times income multiples for applicants in certain professions
|
You are unlikely to get approved for a loan if you have a significantly bad credit history
Mortgage loans unavailable for portfolio landlords with 10+ buy-to-let properties
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What types of mortgages does The Co-operative Bank offer?
The Co-operative Bank predominantly offers fixed-rate deals for first-time buyers, movers and those who wish to remortgage. It has a comprehensive residential and buy-to-let mortgage range, which sometimes comes with incentives such as cashback. It is known for being competitive in the interest rates it charges and it often appears on best-buy lists, including our mortgage best-buy tables, provided by Habito*.
The Co-operative Bank offers a professional mortgage, which is available to people in certain professions that tend to have clear salary progression, including accountants, actuaries, architects, barristers, chartered surveyors, dentists, medical doctors, optometrists, pharmacists, solicitors and vets. These mortgages offer income multiples of up to 6 times annual salary, with a minimum income requirement of £35,000.
How much can I borrow with The Co-operative Bank?
The amount that you will be offered for a mortgage by The Co-operative Bank will be determined by its affordability assessment, which takes into consideration your existing financial commitments and how much you can reasonably afford if interest rates were to rise substantially over the lifetime of the loan. Part of the calculation is based on the applicants' income, with multiples at the following levels:
- 4.49 times annual income for loans less than 85% LTV
- 5.00 times annual income for loans less than 85% LTV with minimum income requirements
- 4.49 times annual income for Help to Buy loans up to 75% LTV
- Up to 6 times annual income for professional mortgages
What interest rates does The Co-operative Bank charge?
Interest rates across all mortgage lenders change frequently, so it is a good idea to check with your mortgage broker at the time you are planning to make your application for the most up-to-date deals. At the time of writing, The Co-operative Bank is offering residential mortgage rates for:
- 2-year fixed rate mortgage deals starting at 5.04%
- 3-year fixed rates mortgage deals starting at 5.09%
- 5-year fixed rates mortgage deals starting at 4.86%
Rates vary depending on the loan-to-value, mortgage size and the product fee that you pay and will change regularly. To find the most up-to-date mortgage rates use our Mortgage Rate Comparison Tool which allows you to check current mortgage deals.
What fees does The Co-operative Bank charge?
In addition to the fees you pay to a solicitor for the conveyancing part of a property purchase, there are also charges levelled by the mortgage lender. In the case of The Co-operative Bank this can include a product fee for some of its mortgages, which can be as high as £1,999. This fee can be added to the mortgage total, although interest will then also be payable on it, at the same rate as the mortgage itself.
In terms of valuation fees, The Co-operative Bank offers one free standard valuation per application for residential and buy-to-let remortgages. There is the option to pay more to have a homebuyer's report or an additional building survey completed at the same time as the valuation, with the fees for this on a sliding scale depending on the asking price for the property.
Can you make overpayments on your Co-operative Bank mortgage?
It is possible to overpay your mortgage by up to 10% of the outstanding mortgage balance each year without incurring a financial penalty. Any payment over 10% will be subject to an early repayment charge. In addition, any cashback provided as part of the mortgage deal has to be repaid if the mortgage is redeemed during the initial offer period. The Lifetime Tracker is not subject to an early repayment charge and allows for overpayments to be made.
The exact terms of early repayment charges are detailed in the terms and conditions of the individual mortgage product and should be explained to you by your mortgage adviser when you take it out.
What is the maximum mortgage term with The Co-operative Bank?
The maximum mortgage term is 40 years, although the exact length will be determined by the applicant's age when they take out the mortgage. The Co-operative Bank mortgages must end by the time the borrower reaches age 75. It is possible for borrowers to take on a term that goes beyond retirement age if they can show that their pension income is likely to be sufficient to service the mortgage loan.
What credit reference agency does The Co-operative Bank use?
The Co-operative Bank primarily uses Experian for its searches, so it is a good idea to check both your overall credit score and the information in your credit report to make sure it's accurate before making your application. When you apply for a mortgage with The Co-operative Bank, it runs a credit check on you, looking at your past financial behaviour and overall creditworthiness. This helps determine whether it will approve your loan and, if so, how much you will be allowed to borrow and at what interest rate.
There are three main credit reference agencies in the UK: Experian, Equifax and TransUnion.
Does The Co-operative Bank offer mortgages to people with bad credit?
The Co-operative Bank sits between mainstream prime lenders and specialist lenders with products specifically designed for people with impaired credit. While it will consider applications from those with mild adverse credit, including one missed mortgage payment or two unsecured loan payments within the previous 12 months, the applicant is required to provide an explanation to the underwriter and to also pass the broader credit score assessment.
Generally, The Co-operative Bank will not approve mortgages where the applicant:
- Is bankrupt, has bankruptcy proceedings pending or has been discharged from bankruptcy in the previous 6 years
- Has an IVA or had one in the last 6 years
- Has an unsatisfied CCJ
- Has had a CCJ in the past 6 years for more than £100
- Has defaults registered in the past 12 months or defaults during the past 6 years totalling more than £500
- Has had a repossession
The Co-operative Bank customer reviews
According to customer review site Trustpilot, The Co-operative Bank scores 4.1 out of 5.0, based on over 6,000 reviews. There are almost an even amount of 5-star reviews as there are 1-star reviews. The positive mortgage-related reviews point to the great service and vested efforts of the case managers in getting mortgage loans arranged while the more critical reviews point to difficulty getting through to customer service call centres and delays in carrying out requests. According to a review by Which? though, The Co-operative Bank is ranked 20th out of 22 lenders, based on a range of factors, including customer service and value for money.
Summary
The Co-operative Bank could be a good option for you if you are looking for a lender with ethical credentials, as well as if you have minor blips on your credit record. It may also be appealing to those in professions that mean they will qualify for a professional mortgage, which offers higher income multiples to supercharge your borrowing power. It can be sensible to compare mortgage deals across the market based on your specific circumstances and priorities before deciding which is best and a mortgage broker can assist with this process. Often mortgage brokers have access to mortgage deals that are not available to borrowers directly and their in-depth knowledge of lending criteria, affordability measures and the differences between contracts will help you source the right mortgage deal for you. Habito* is an online mortgage broker that does not charge for providing mortgage broking services and you can also source mortgage professionals in your area using the professional directory services, VouchedFor*.
If a link has an * beside it this means that it is an affiliated link. If you go via the link Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. But as you can clearly see this has in no way influenced this independent and balanced review of the product. The following link can be used if you do not wish to help Money to the Masses - Habito, VouchedFor
