Canada Life smartER Lite Details (Drawdown)

Background

Canada Life entered the equity release industry following the acquisition of Retirement Advantage which completed in 2018. Prior to the take-over Retirement Advantage was formed by a re-branding of MGM Advantage in 2015, following the purchase of former equity release lender - Stonehaven Equity Release. Tracing its roots back to 1852, Retirement Advantage were a specialist in providing retirement products such as lifetime mortgages and retirement accounts.

Canada Life's range of lifetime mortgage uk plans offer a 'design-it-yourself' approach to equity release. Offering a suite of products such as drawdown, lump sum, erest-only lifetime mortgages and voluntary repayment schemes, plus they have also expanded into Buy-to-Let and Second Home equity release plans.

As additions to these plans, a qualifying homeowner can add-on extra's they require such as cashback, or drawdown facilities. All addition options will influence the final deal available. Couple this with their 8-year fixed early repayment charge makes Canada Life a serious lender in the today's equity release marketplace.

Canada Life’s smartER range has broad appeal and with a wealth of features, is a product that provides many elements of future proofing, which are very important should your circumstances change moving forward.

Eligibility

The core Canada Life smartER equity release range are essentially roll-up lifetime mortgages with options that allow you to build a plan designed for you. This smartER range of products would suit any homeowner requiring either a simple roll-up due to lack of affordability, or the choice of making interest and/or capital repayments.

The smartER product suite is segmented by loan-to-value ratio's. They begin with the lowest loan-to-values which are offered by the 'Lite' products, through to the Gold, Gold Plus and Platinum versions, which offer increasingly higher maximum loan amounts.

The minimum property valuation acceptable to the Canada Life smartER Lite plan with voluntary payments is £70,000, with a maximum overall property value of upto £12 million nationwide. For property valuations greater than £12m, contact the Equity Release Supermarket team on Freephone 0800 088 5898 for your bespoke quotation.

The property to be offered as security should be the homeowners main residence and located within England, Scotland and Wales.

This Canada Life smartER Lite is available on both a single and joint life basis with a minimum age of youngest homeowner being 55, and a maximum age at application stage being 90. For joint equity release borrowers, the youngest applicant must be 90, or younger.

The minimum release at application stage is just £10,000, with an overall maximum equity release amount of £1 million available on a nationwide basis & subject to underwriting. For loans greater than £1 million, bespoke quotations are available via Equity Release Supermarket. Please call Freephone 0800 088 5898 for your personalised Canada Life Key Facts Illustration.

Features

The Canada Life smartER Lite plan is a simple lump sum lifetime mortgage, but with the option of making repayments intwhich offers a one-off tax-free cash lump sum at inception.

The smartER Lite plan also allows ad-hoc or structured voluntary repayments, with no penalty, of upto 10% of the original amount borrowed. Being part of the smartER suite, the only difference between this Lite plan and the Gold and Platinum versions, is the amount each will release via their loan-to-value percentages.
In essence, this Lite Plan will release a lower loan amount - typically 5% less than the Gold and and 15% less than the Platinum version. However, the resultant effect is that the smartER Lite plan attracts a much lower interest rate than both the Gold and Platinum deals.

Included as standard now in Canada Life's smartER range are two Early Repayment Charge waivers - Downsizing Protection and the Compassionate 3-Year Early Repayment Waiver. Both these automatic inclusions allow for the plan to be repaid early, with no penalty, under certain life changing events: -

• Downsizing protection allows homeowners wishing to downsize to another property after 5 years from inception of the plan, to be able to repay the whole mortgage with no penalty.
• The Compassionate waiver allows any survivor of a joint lifetime mortgage plan, the ability to repay the whole scheme with no penalty as long as repayment occurs within a 3 year window of their partner either dying, or moving into long term care.

A generous free valuation is offered along with a fixed equity release lifetime interest rate on the initial lump sum.

One of the strongest features of the smartER range is the early repayment charge (ERC). Canada Life only charge an ERC for the first 8 years following inception, or when taking additional borrowing on this equity release loan. The ERC starts at 5% for the first 5 years, then reduces to 3% for the next 3 years, and then NO penalty thereafter.

Canada Life are members of the Equity Release Council and therefore all their plans come with a no-negative equity guarantee. This means that upon eventual sale of the property, any beneficiaries cannot be left with a debt, over and above the value of the property, owing to the equity release lender.

Additional borrowing is available once all drawdown funds have been utilised in the future. The minimum additional borrowing amount is £4,000 with no completion fee charged.

Options

This Canada Life smartER Lite (flexi) Lifetime Mortgage enables any homeowner to spend their tax-free cash as they wish and also choose to make a level of voluntary contribution which befits their affordability levels, and not that of the lenders, as a conventional mortgage would.

Homeowners can choose their level of contribution towards the interest charged by Canada Life which can be upto 10% of the original capital amount borrowed, with NO penalty charged. One important feature of Canada Life's smartER Lite Plan is that they do NOT require any evidence of income or affordability, both pre and post retirement age.

With levels of repayment of upto 10% of the original amount borrowed, homeowners can manage - if they wish, the future balance of their smartER Lite Plan. For instance, to facilitate an interest-only basis and thus maintaining a level mortgage balance, the plan would need 100% of the interest to be repaid each month. Even repaying a lower amount than 100% of the interest charged each month would help in reducing the normal effects of roll-up and keep the balance lower than otherwise have been.

Payments are flexible and the level of repayment is chosen by you. Unlimited payments are permitted throughout the year and by exercising the maximum 10% repayment strategy, could effectively reduce the balance, if required. The minimum repayment is £50 and these payments can be made by debit card, cheque, bank transfer, or most commonly for an interest only mortgage - by standing order. A standing order mandate is enclosed within your welcome pack.

A further option for inclusion is the Inheritance Protection feature, so the homeowner can secure a fixed percentage of the final sale value of the property. This is important for those who wish to guarantee a percentage of the house value from their inheritance.

Being a core smartER product, the Lite plan can have a cash drawdown facility built in. Therefore, when the initial tax-free lump sum is released, any remaining unused cash is retained in an uncapped cash reserve facility. The minimum drawdown available is £2,000 a time and there are no administration fees charged for these withdrawals.