The insurer’s Home Finance business has unveiled an interest roll-up lifetime mortgage, allowing over-60s to unlock the value of their property.
The product, called ‘Capital Select Platinum Plus’, will enable customers to tap into money tied up in their property.
Canada Life said it will offer a 6% higher loan to value than its existing Platinum product, starting at 34% for consumers aged 60 or over.
This means that homeowners with a property worth £500,000 ($654,412; €584,505) could unlock £30,000 more compared to the company’s other Platinum offering.
This follows a recent report by the UK’s Equity Release Council, that found a record £936m was unlocked through equity release by British homeowners aged 55+ in the first three months of 2019.
A ‘flexible’ approach
Overall, Canada Life’s range allows customers to borrow up to £1m against their property and make flexible payments, which could range from as low as £50 up to 10% of the initial loan amount each year, without incurring an early repayment charge.
Additionally, the payments can be made as frequently as the customers want, as long as they stick to the yearly threshold.
“Our Capital Select Options range offers homeowners the chance to tap into their property value, while retaining the flexibility to pay back some of the loan without incurring early repayment charges if they wish to reduce the impact of interest roll-up,” said Alice Watson, head of marketing and communications at Canada Life Home Finance.
“Platinum Plus allows homeowners to draw on more of their wealth – whether that goes towards topping up their retirement income, or helping them to clear an outstanding interest-only mortgage.”
The offering has a monthly interest rate of 6.45% and an annualised interest rate of 6.65%, but it also offers a £0 completion fee.
This compares with the Capital Select Platinum product, which has a monthly interest rate of 5.41% and an annualised rate of 5.55%.
