Canada Life entered the equity release industry following the acquisition of Retirement Advantage in 2018. Previously, Retirement Advantage were formed by a re-branding of MGM Advantage, following the purchase of former equity release lender called Stonehaven Equity Release.
The lender is one of the leading providers in the flexible lifetime mortgage and equity release schemes marketplace. The products available from Canada Life offer a level of customisation to homeowners who want to be able to tailor their product to their individual needs.
The Canada Life Interest Select Gold is available to homeowners who are between the ages of 55 and 90. The product is available on both a single and joint life basis. If borrowing jointly, the youngest borrower must be 90 or younger.
Available equity release loan amounts range from £10,000 to a maximum loan of £750,000.
In order for the property to be eligible for this product, it must have a minimum valuation amount of £70,000. The maximum valuation can go all the way up to £10 million. The property must be the homeowner’s main residence and must also be located in England, Wales or Scotland.
The Canada Life Interest Select Gold comes with a variety of unique features. It is an interest-only lifetime mortgage scheme that provides an initial tax-free lump sum cash release to the homeowner. The homeowner is able to use that cash however they’d like and can use it immediately. Any remaining cash can be put aside in a cash reserve facility. The minimum withdrawal amount allowed from the cash reserve facility is £2,000.
As Canada Life is a member of the Equity Release Council, each of their products comes standard with a no-negative equity guarantee. This means that if the eventual sale of the property does not satisfy the outstanding loan balance, the estate’s beneficiaries are not held responsible for the remaining balance.
The structure of the early repayment charges is also unique with this product. Canada Life only levies early repayment charges for the first 8 years following the loan inception, drawdown, or additional borrowing. For the first 5 years, the early repayment charges are 5%. For the next 3 years, the charge is 3% and there are no early repayment charges after year 8.
Additional borrowing is also available on the Canada Life Interest Select Gold with a minimum withdrawal amount of £4,000.
There are additional options available to the homeowner who takes advantage of this product. There is an Inheritance Protection available which allows the homeowner to secure a fixed percentage of the final sale value of the property to be used as an inheritance.
Two early repayment charge waiver features are built into Canada Life's Interest & Voluntary Select plans - Downsizing protection allows any homeowner who has held their plans for 5+ years, can repay their equity release mortgage with NO penalty upon downsizing.
The second feature is a compassionate waiver on joint plans where one party dies, or moves into care. On such an event, the survivor has a 3-year window in which they can opt to repay the whole scheme with NO penalty also.
The homeowner is also able to choose how much they contribute toward their interest. It can be anywhere between 50% of the interest calculation and 100% of the interest charged monthly. There is no affordability assessment conducted and therefore no proof of income is required. If the homeowner wanted to simply keep a level balance on their loan, they could pay 100% of the interest accrued.
The fixed monthly payment must be maintained for a minimum of 5 years, or the entirety of the loan. After five years, there is an option to stop making monthly payments and instead just allow the interest to roll-up. If the loan converted to a roll-up interest scheme without pre-determining this term, then the interest rate would increase by 0.2%.
If a homeowner wants to add the cash drawdown facility, the interest rate would also increase by 0.2%**.
Lastly, cashback of £1,000 is available as an option to the homeowner. If chosen, the interest rate would increase by 0.10%.
This Canada Life product is ideal for the homeowner who wants to be able to build an equity release scheme that is tailored to their personal requirements. This could be to control the interest accruing on their loan, or just concerned about the impact of interest roll-up.
£1000 cashback available for loans over £40,000
Call the Compare Equity Release team on 0800 028 3142 for further details, or to request a quote on the Canada Life Interest Select Gold Lifetime Mortgage.