Canada Life Second Home Lifestyle Option Equity Release Plan

Equity Release Compare Deals BTL/Second Home Second Home Lifestyle

Second Home Lifestyle

Type Fixed
Rate 5.63%
APR 5.90%

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Incentives:

Free Valuation

Offers:

Fixed Early Repayment Charges
Non-Equity Release Council Standards
Release Equity on Second Home

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 lump sum, interest only lifetime mortgages and voluntary repayment schemes, they have also expanded into Buy-to-Let and Second Home equity release plans. This multi-national life office has introduced a line of products to be used by people who own a second property.

The suite of Second Home lifetime mortgages offered by Canada Life, add to a somewhat depleted marketplace for equity release schemes being available on second properties. These schemes exist where homeowners have use of their 2nd or holiday home for personal use, or let-out for a very short durations. Therefore, with these equity release plans, existing homeowners can capitalize on the benefits of equity release schemes, even if they are not living in the property.

Eligibility

The minimum loan amount allowed with the Canada Life Second Home Lifestyle Options product is £10,000 with the maximum being £750,000. The minimum age is just 55 and the maximum is 90 years of age. If two homeowners borrow jointly, the youngest borrower must be 90 years old, or younger.

The property value range eligible for the Canada Life 2nd Home equity release scheme is £70,000 upto a maximum release of £6 million. However, properties with a valuation over £6 million can still be reviewed individually. To qualify the property must also be located in England, Wales, or Scotland. Please call Freephone 0800 802 1051 for your personalised Canada Life Second Home Lifestyle Key Facts Illustration.

In order to take advantage of their Second Home plan, the property must be made available for the sole occupancy of the owner and their family. When used for this purpose, Canada Life impose a mandatory requirement that the property must be used by the family for at least 4 weeks in every year.

Canada Life will allow it to be let out, but this must only be for a maximum of 4 weeks at a time. There must be no formal agreements or Assured Shorthold Tenancies in place to qualify. Additionally, the 2nd home property mustn't be advertised for letting purposes, such as through any estate agency, even if online.

Under the 2nd Home equity release product range, the loan-to-values start from 19% at age 55, and ends at 44% of the property value for ages 80-90. These are lower lending percentages than the standard Canada Life equity release product range, but represents the additional risk involved with lending on second homes.

Features

The Canada Life Second Home Lifestyle Options plan provide homeowners with a one-off lump sum payment. With this featured plan, no payments are necessary, thus the interest accrues as it would with any traditional roll-up lifetime mortgage. The interest is added to the loan each month over the lifetime of the loan, and only needs to be repaid upon the death, or long term care of the homeowner.

The early repayment charges (ERC's) are favourable with them being fixed for 8 years of the loan, as well as any additional borrowing taken in the future. For years 0-5, the early repayment charge is 5%. For years 6-8, the charge is 3% and there is no early repayment charge for years 9 and above.

Additional borrowing is allowed with the Lifestyle Options plan and approval for such is dependent upon the criteria at the time of this separate application. The minimum amount allowed under additional borrowing is £4,000 and there is no completion fee applied.

Although Canada Life are members of the Equity Release Council (ERC), this Second Home Lifestyle Mortgage does not meet all the product standards mandated. This only applies to the fact the homeowner hasn't the right to remain in the property for life, or moves into long-term care, which for a 2nd home isn't too significant. More importantly, the owner still has the importance of the protection afforded by the No Negative Equity Guarantee, fixed lifetime interest rate and independent valuations.

Options

With the Over 55 Second Home Lifestyle plan, homeowners have no need to make any payments, instead, the interest is rolled-up and added to the existing loan balance. Therefore, this product is most attractive to those property owners who want a lump sum and not have any repayments that could affect their monthly budget. Partial payments can be made on this Lifestyle version, however an early repayment charge may apply.

The Canada Life Second Home plans are ideal for homeowners who own one or more properties, and still want to take advantage of an equity release scheme to raise capital for whatever purpose. These could be for reasons of mitigating capital gains tax, by not having to sell their second property, but instead releasing equity to fund other projects.

Additionally, second homeowners may wish to clear an existing interest-only mortgage, where no endowment or suitable repayment vehicle now exists. Again, rather than having to sell the property, a second/holiday home equity release could be used to remortgage the property, thus maintaining ownership of a holiday home for their retirement.

Second Home equity release could also be used to mitigate inheritance tax. As the mortgage debt rolls-up over time it potentially reduces the net value of the estate.
Other uses can include using the Canada Life Second Home Lifestyle plan to assist with long term care funding, part of a divorce settlement and many more besides.

Our local Equity Release Supermarket advisers are on hand to help discuss and advise on the potential benefits of the 2nd Home lifetime mortgage plans from Canada Life.

To obtain further information or to request a quotation on the Canada Life Second Home Lifestyle Scheme, please contact the Equity Release Supermarket team on Freephone 0800 802 1051 today.

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