I have been recommending Canada Life lifetime mortgages for years. But are their plans any good, and how do they compare to the competition?
Canada Life offers the most popular type of equity release, a lifetime mortgage. All Canada Life lifetime mortgages meet the Equity Release Council standards and afford you their protections. Canada Life is one of the market's most flexible equity release lenders.
Let's review:
What interest rates does Canada Life offer? And how do they stack up against the competition?
* Some other lenders offer variable live pricing. Please request your personalised illustration for your best rate.
How much money can Canada Life provide on their lifetime mortgages? Use our calculator to find out, plus see how they stack up to the wider market.
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Canada Life offers some of the most flexible propositions in the market, and I have often recommended them. In fact, last year, Canada Life ranked in the top four equity release lenders we recommended.
Canada Life offers the most popular type of equity release plan, the lifetime mortgage. Let's explore some criteria and features in greater detail:
Free valuations: All Canada Life equity release plans offer free valuations on initial borrowing, regardless of the property's value.
I love this feature because it takes all the risk away from you. If there are any unforeseen issues with the survey, you will not have to pay anything upfront, and you will not be liable for paying a penny should you decide not to proceed.
Arrangement fees: There are no arrangement fees on Capital Select lifetime mortgages.
Big brand: Canada Life is a household name with a strong reputation and a long trading history.
This can provide you with great peace of mind when taking a plan that could last the rest of your life!
Useful features offered by Canada Life
Significant life event waiver: For joint applications with Capital Select lifetime mortgages, if you repay the lifetime mortgage within three years of the date the first borrower died or moved into long-term care, an Early Repayment Charge (ERC) is not applied.
Downsizing protection: With Capital Select lifetime mortgages, if the loan is repaid after five years because you sell your home and move to a different property, an Early Repayment Charge (ERC) is not applied.
This waiver includes buying a new property, moving in with family members, moving abroad, or moving into rented accommodation.
Partial repayments: You can repay up to 10% of the loan amount each year without penalty. There is a minimum payment amount of £50. Your annual allowance is renewed on the anniversary of the date the borrowing completes. Any unused balance does not roll over into the following year.
Short ERCs: Canada Life only levy an Early Repayment Charge for the first eight years: 5% in years 1 - 5, 3% in years 6 - 8, and no fee thereafter. If you have a plan with cashback, you will be charged 8% in years 1 - 5 and 3% in years 6 - 8, and no fee thereafter.
Canada Life's equity release underwriting
Flexible on construction: Canada Life are one of the most flexible equity release lenders for non-standard construction properties.
Lease length: Canada Life will accept properties with shorter leases than most equity release lenders. The minimum leasehold tenure needs to have an unexpired term of at least 155 years minus the age of the youngest borrower, or 75 years, whichever is greater.
Lease extensions: For leasehold properties, you can extend your lease concurrently with the equity release application. Canada Life allows the equity release funds to pay the capital required to the freeholder to extend the lease (providing that the lease extension is granted concurrently with receiving the funds).
Title split: If you are considering splitting your title with the land registry, Canada Life will consider allowing this to happen concurrently to the equity release application. The title split must happen concurrently when Canada Life releases the equity release funds.
If you are planning to split your title, you must show plans for the changes to the equity release surveyor to ensure that they value the correct land. Furthermore, the legal team will need to review the documents to ensure that there are no future land lock or rights of access issues.
Large estates: Canada Life is happy to lend on properties up to a maximum value of £12,000,000, but it will consider more expensive properties in desirable areas. Furthermore, it will accept properties with up to 5 acres of land but will consider larger plots on an individual basis.
Married couples single applications: Canada Life is one of only three equity release lenders who allow sole applications from married couples. If you are married and own your home solely, Canada Life is often recommended.
We can discuss applying solely and jointly to ensure your needs are best met. Please speak with one of our equity release advisors for more information.
Canada Life's equity release plans are feature-rich but may cost more than alternatives from other lenders.
If you have a self-contained annexe, Canada Life will usually not consider its value when assessing how much money they can lend.
As part of our equity release advice service, we will consider plans from Canada Life and compare them to other equity release lenders.
Please speak with one of our equity release advisors for your personalised illustration.
Canada Life is one of the most popular equity release lenders. Benefits of their plans include:
- Downsizing protection
- Reserve facilities, and
- allowing sole applications from married applicants.
However, you may be able to achieve larger loans and lower interest rates from other equity release lenders. Furthermore, Canada Life does not offer medically underwritten lifetime mortgages.
When you are ready, you can book an appointment with one of our equity release advisors, who can show you how Canada Life compares to other lenders for your specific needs.
If you have an existing equity release plan with Canada Life, we can help you assess the best way to borrow additional funds.
Where you have a reserve facility in place (from a drawdown plan), you can contact Canada Life directly on 0800 068 0212 to request additional funds.
However, I always suggest that you compare additional borrowing with Canada Life to the cost of moving to a different lender.
We will require your authority to discuss your existing plan with Canada Life. Please complete the form below so that we can send you a Letter of Authority to complete, sign, and return so that we may speak with Canada Life.
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What a typical client looks like
As covered above, Canada Life's equity release plans fit the masses. However, there are certain types of clients who, from my experience, I am more likely to recommend a Canada Life equity release plan. Let's run through some examples of prime Canada Life clients:
Example 1
John and Jane are 81 and 50, respectively. They live in a four-bedroom detached house that is in good repair and built using standard construction.
John is the sole owner of the property, and Jane does not want to live alone in such a large home.
However, John has an interest-only mortgage that needs to be repaid.
With a lifetime mortgage from Canada Life, John can repay his mortgage, and they can both continue living in their home until John passes away.
Example 2
John and Jane are both 75 years old. They live in a large family home they have owned for the last 40 years.
They need to repay their interest-only mortgage and had originally planned to downsize to pay off the balance. However, they do not want to move because their grandchildren often stay with them, and they need the space.
Once their grandchildren are older, they wish to move and repay the mortgage.
Due to their ages, their current mortgage lender will not extend the interest-only term, and they do not meet the affordability requirements for a new interest-only mortgage.
John and Jane are recommended a Canada Life equity release plan, which includes downsizing protection. This plan allows them to repay the mortgage after five years without penalty if they sell their home.
Example 3
Jane is 80 and lives in a flat in a desirable area with good access to local amenities.
She feels her home meets her needs for the rest of her life; however, with the rising cost of living, she would like access to money to support her standard of living.
Jane had been refused equity release from other lenders as her lease has only 75 years remaining. However, Canada Life accepts her property as the lease length meets their minimum criteria.
Therefore, with a lifetime mortgage from Canada Life, Jane can continue to live in her home while having access to a drawdown lifetime mortgage that will provide her with enough money to support her needs.
Why don't I go to Canada Life directly?
Of course, you can go to Canada Life directly to request their lifetime mortgages. However, you still require financial advice before taking one of their plans, and they do not currently have any directly employed advisors. Instead, Canada Life will put you in touch with a financial advisor who will only advise you on Canada Life's equity release plans.
If you choose to work with an advisor who works with other lenders, you could access a more suitable lifetime mortgage from another provider.
But won't I get a better deal by going direct?
The interest rates charged and the amounts of money you can release will be the same whether you go direct or through another advice firm.
Why not book your free equity release consultation with one of our equity release advisors to explore your options?
In closing
I hope I have helped you understand Canada Life's equity release product offering and that you now know whether you could be a Canada Life equity release client. If you have further questions about Canada Life's equity release plans or would like to see if Canada Life is the plan I recommend for you, contact us at 0207 158 0881.
Remember, we also compare plans from other equity release lenders, so we can save you time shopping around and find the most suitable plans. You can also use our equity release calculator to compare the lowest-rate plans.
If you have further questions, why not speak with one of our qualified advisors?
Call us on 0207 158 0881 or use our online form to book your FREE consultation.
While a qualified equity release advisor has written this guide, it is not intended to be used as financial nor legal advice and should not be relied upon.
To understand the full features and risks of an Equity Release plan, ask for a personalised illustration.
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