Canada equity release

Canada Life has been operating in the UK since 1903, offering retirement, protection, and financial solutions across the country. It boasts of 3.5mn customers and manages over £40bn of equities. Canada Life has a variety of equity release products on offer, which we will delve into and help you decide whether it’s the right company for you.

Equity release products offered by Canada Life

The company only offers lifetime mortgages, so if you’re looking for home reversion schemes, this won’t be the provider for you. Currently, the company provides the following products.

The company only offers lifetime mortgages, so if you’re looking for home reversion schemes, this won’t be the provider for you. Currently, the company provides the following products:

Capital Select Options

Receive a lump sum of money borrowed against the value of your property. Instead of waiting until the end of the plan to pay off the loan, you can start paying all of the interest and up to 10% of the loan each year. A great feature is that you won’t be penalised if you decide not to make payments for one year, as the solution is completely flexible.

With Capital Select, there are various options to choose from, each allowing you to borrow different amounts of money. To qualify, you must notify the company of what you plan to use the funds for, you must receive financial advice, and you have to borrow at least £4,000.

Lifestyle Select Options

This product is similar to Capital Select Options, but you may use the funds however you like, such as going on a long cruise or paying for home improvements. With this option, you can also choose a Drawdown lifetime mortgage where you take a smaller initial amount and leave the rest in a cash pot from which you can withdraw money whenever you please. This can be a great choice if you’re concerned about the interest roll-up on your lifetime mortgage. 

Like the Capital Select product, you can also pay up to 10% of your loan each year, in addition to the interest. You may also implement an inheritance guarantee that ensures part of the value of your property is left to a loved one when your home is sold.

Second Home Options

Unlike many providers in the UK, Canada Life allows you to release equity from a second property. Usually, you can only use your primary residence that’s located in the UK. The company also offers flexibility with this option, allowing you to pay off up to 10% of the loan each year plus the interest.

Note that you won’t be able to rent your second property for more than four weeks per year if you plan to release equity.

Buy-to-let mortgage

If you have a buy-to-let mortgage, you can still release equity from your property through Canada Life. This equity release product is explicitly aimed at buy-to-let customers over 55 years old and who reside in the UK. Like the traditional lifetime mortgages offered by Canada Life, you have flexibility in choosing how to pay back the loan.

Features and benefits of Canada Life Equity Release

The main selling point of Canada Life equity release is flexibility. Unlike many providers, who require you to make fixed payments each year if you’ve chosen to pay off part of the loan, Canada Life gives you a choice. This is a great feature that will help you during those months where you have less cash.

Other benefits include:

• You retain 100% ownership of your property throughout the plan.
• Interest rates on your loan remain fixed.
• You have the option to move properties and carry the mortgage with you.
• There’s a no negative equity guarantee.
• The company will value your property and set up your mortgage for free.
• Option to release equity from a second home.
• The firm offers a unique buy-to-let equity release product.

How much does Canada Life Equity Release cost?

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The cost of your equity release plan will depend on the rates offered by the company, your age, and the value of your property. To get an exact figure, you should contact the company for a quote.

Here’s an example to give you a better idea of the costs:

• A 60-year-old applicant with a property worth £200,000 could borrow £58,895 at an average interest rate of 3.60%. The same applicant could borrow a maximum of £72,000 at 6.32%.

Note that the rates you get might be different from this example and that the final amount will depend on the value of your home. Also, you should know that many lenders won’t approve your application if you still have a considerable amount left to pay on your standard mortgage.

Overview of Canada Life Equity Release plan details

Canada equity release plans

Canada Life equity release ratings

The British rating firm Defaqto awarded Canada Life its 5-star ratings for its Flex Lifetime Mortgage Capital Select and Standard Capital select equity release plans. It also awarded 4-stars to its Flex Lifetime Mortgage Lifestyle Select and Standard Lifestyle Select plans, in addition to 3-stars to its Lifetime Mortgage 2nd Home Lifestyle and Lifetime Mortgage 2nd Home Voluntary Select Plans.

Is Canada Life Equity Release right for you?

As evidenced by the fantastic reviews made by Defaqto, Canada Life is a reputable provider of equity release products. If you’re looking for a lifetime mortgage, you will benefit from the company’s flexible repayment plans that allow you to stay on top of interest. The company is also great for financial advice and for putting customers’ interests first.

It’s also the best provider if you’re planning to release equity from a second property or a buy-to-let property, solutions that other companies don’t usually offer. On the other hand, Canada Life isn’t for you if you’re looking for a home reversion plan.

You should ensure that you conduct thorough research and discuss your options with a professional financial advisor before making any decisions.