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’s products are known for being able to be tailored and customized to each individual homeowner’s situation and needs.
Canada Life has released the Lifestyle series of products, all of which come with a one-time lump sum payment to the homeowner. The homeowner is then never required to make payments against their loan balance. The interest accrues, and the full debt is paid when the home is eventually sold, most often when the homeowner enters long term care or passes away.
The Lifestyle product range includes additional versions such as the Lite, Gold, Gold Plus, Platinum and Platinum Cashback. Homeowners will likely make a choice between these products based on the loan-to-value of each and the interest rate applied.
The Canada Life Lifestyle Lite offers equity releases from £10,000 upto a maximum of £1 million. In order to be eligible for this product, the homeowner must be between the ages of 55 and 90 and must have a home that is eligible. The product is also offered on a joint basis, in which case the youngest borrower must be no older than 90 years old.
For a property to be eligible, it must be located in England, Scotland, or Wales. It must also have a valuation between £70,000 and £6 million. If the valuation exceeds £6 million, it may still be possible to take advantage of this product, as it can still be reviewed by Canada Life. Please call the Compare Equity Release team on 0800 679 5169 for a bespoke quotation.
Known for its innovation, these products produced by Canada Life continue that trend. To start, the early repayment charges are fixed for only the first 8 years following the completion of the loan. For years 0 to 5, the early repayment charge is just 5%. For years 6 to 8, it is 3%. There is no charge applied starting at year 9 and these plans have the shortest early repayment period in the industry currently.
Both a no negative equity guarantee and a downsizing protection come standard with this product. The no negative equity guarantee ensures that if the eventual sale of the property does not satisfy the full loan balance remaining, the homeowner’s estate will not be held responsible for paying the difference. The downsizing protection allows the homeowner to pay off their full loan balance after 5 years if they decide to sell the property and move to another home.
Additional borrowing is another feature offered as an option with this product. The approval for that additional borrowing depends on the lending criteria imposed at the time of the application. If the homeowner does take advantage of this extra borrowing, the homeowner must stay within the original LTV range and is not permitted to switch to a product with a higher LTV. The minimum amount allowed with additional borrowing is £4,000 and the maximum is the maximum permitted with the product.
The current loan-to-value’s for the Lifestyle Lite product start at 11% at age 55 and go up to 36% for ages 80 to 90.
In addition to extra borrowing, a cash reserve facility is another option offered with this product. The minimum withdrawal amount available is £2,000 and the maximum is the full amount left in the cash reserve. If the homeowner chooses to take advantage of the cash reserve facility, the interest rate on the product increases by 0.2%. The homeowner can make withdrawals from the drawdown facility at any time and as often as they wish, though only one request can be considered at a time. The amount available in the cash reserve facility is decided upon and fixed at the time of loan completion.
The Lifestyle Lite offered by Canada Life is a great product for any homeowner who wants to receive a lump sum payment, but does not want to necessarily be concerned with making payments against the loan. This is a good product for any homeowner who is not concerned with interest roll-up and requires a competitive interest rate with a potential early repayment in the future.
Call the Compare Equity Release team on 0800 678 5169 for further details, or to request a quote on the Canada Life Lifestyle Lite product.