Canada Life Capital Select Super Lite Details (Voluntary)

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.

As additions to these plans, a qualifying homeowner can add-on extra's they require such as cashback, or drawdown facility. 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.

Eligibility

The core Canada Life Capital Select Lifetime mortgage is essentially a roll-up lifetime mortgage, offering the ability to make repayments where no proof of income or affordability is required. These products would suit any homeowner looking for the highest release and requiring flexible repayments, thus enabling control over the future balance of their equity release mortgage.

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

The minimum property valuation acceptable to the Canada Life Capital Select Super Lite plan is £70,000 with a maximum overall property value of upto £6 million nationwide. For property valuations greater than £6m, contact the Equity Release Supermarket team on Freephone 0800 802 1051 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 lump sum plan 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 802 1051 for your personalised Canada Life Key Facts Illustration.

Features

The Canada Life Capital Select Super Lite plan offers the lowest loan-to-value ratio of any of Canada Life's product range from age 55 upwards. It is therefore designed for those looking for a low equity release lump sum, but in conjuction with a very competitive interest rate.

Even when offering the lowest loan-to-value ratio's, the Capital Select Super Lite plan still allows ad-hoc or structured voluntary repayments. Being part of the Capital Select suite, the only difference between this Super Lite plan and the Lite and Gold versions is the amount each will release via their loan-to-value percentages.

In essence, the Capital Select Super Lite Plan will release a much lower loan amount - typically 3% less than the Lite version and 6% less than the Gold plan. However, the resultant effect is that the Capital Select Super Lite plan attracts the lowest interest rate across all their lifetime mortgage deals.

Included as standard now in Canada Life's Capital Select 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 Capital Select 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 lite 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 Capital Select Super Lite Lifetime Mortgage enables any homeowner to spend their tax-free cash as they wish and choose to make a level of voluntary contribution which befits their affordability levels, and not that of the lenders, as any 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 Capital Select Super 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 the future balance of their Capital Select Super 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 simply 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 Capital Select product, there is also the option to add a cash drawdown facility. Therefore, when the initial tax-free lump sum is released, any remaining unused cash is retained in an uncapped cash reserve facility. The Lite version is ideal for those looking for a small cash facility and at the same time enabling control of the balance by making monthly repayments, whilst having access to future funds. The minimum drawdown available is £2,000 a time and no administration fees are charged for these withdrawals.

A cashback option is available on all Capital Select plans. This allows for 3% cashback of the initial loan amount with no cap. This will incur an additional 0.3% MER to the base interest rate.

*Adding a drawdown facility to the Capital Select Super Lite Plan has the effect of adding 0.2% to the interest rate
**The 3-year no early repayment charge applies to joint life plans where the loan is repaid within 3 years of death or long-term care of a partner
***Free application offer runs until 30th September 2020 (normally £650 in England & Wales, £795 in Scotland)

To obtain further information or to request a quotation on the Canada Life Capital Select Super Lite Lifetime Mortgage, please contact the Equity Release Supermarket team on Freephone 0800 802 1051 today.