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Canada Life equity release review 2021
Compare Canada Life equity release plans and discover the pros and cons using this guide.
Table: sorted by the lowest AER.
We work with Age Partnership, one of the UK’s leading equity release specialists, which scours more than 500 deals to find the best equity release products. We compare only lifetime mortgages, and do not compare any home reversion plans. To understand the features and risks of lifetime mortgages, ask for a personalised illustration from a lifetime mortgage company. Check that this type of mortgage is suitable for your needs if you plan to move or sell your home or you want your family to inherit it. If you're not certain, seek independent advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
What's in this review?
What is Canada Life?
Canada Life is a financial services company offering a range of retirement and investment products. This includes a series of lifetime mortgages for those looking to release equity from their property.
What equity release plans do Canada Life offer?
Canada Life offers five different brands of lifetime mortgage. Below is a list of the five lifetime mortgages and their key features.
- Lifestyle Options. A basic lifetime mortgage.
- Prestige Options. A lifetime mortgage where you can borrow up to £2 million.
- Capital Select Options. This mortgage allows you to make early repayments with no charge, up to 10% of your initial payment per year.
- Interest Select Options. A lifetime mortgage for those who want to make monthly interest payments. You can pay anything from 50-100% of the interest per month.
- Second Home Options. A product designed especially for those who want to secure their loan against their second home.
How does it work?
Following a successful application, you will be granted a tax-free lump sum. The maximum amount you are permitted to borrow will depend on your age and the value of your home.
Canada Life will begin calculating the interest immediately, but there’s no obligation to make any repayments on this loan until after you die or move into long-term care (unless you choose its Interest Select product).
You can make voluntary early repayments on your loan, although you may face an early repayment charge (ERC) in some scenarios. Some Canada Life mortgages allow you to make early repayments with no ERC.
Here are some features you can add to your loan.
- Cash reserve. You can choose to add a cash reserve, which you can draw down from whenever you like. This will reduce the amount you are able to borrow as a lump sum.
- Inheritance guarantee. You can choose to protect a portion of your home’s equity to pass onto your heirs. Again, this will reduce the amount you can borrow as a lump sum. Whether you add this or not, you’ll never owe more than the total value of your property.
- Cashback. Some products will allow you to earn up to 3% cashback after a successful application.
Is Canada Life safe?
All lifetime mortgages are regulated by the FCA. You’ll have to apply through a financial advisor. They’ll be able to ensure you understand the product and recommend the best one for your needs. Also, there’s no danger of falling into negative equity.
So, it’s a safe product in that sense.
All applicants should be aware that interest can compound quickly, especially if you’re not making any repayments on the loan. However, Canada Life also has options that allow you to make early repayments without paying an ERC.
Eligibility criteria
- You must be a UK resident.
- You must own a property in England, Wales or Scotland worth at least £70,000
- You must be aged 55 or older.
How to apply
You can apply for one of these products through a financial advisor. Canada Life suggests you find one through the Equity Release Council.
Pros and cons
Pros
- There are plenty of products to choose from.
- You are given plenty of opportunities to make early repayments without facing a charge.
- You can add a reserve fund to draw down extra cash from.
Cons
- Interest can compound quickly, leaving little for your heirs after you die.
Canada Life customer reviews
Canada Life has received mixed reviews from customers, according to review platform Trustpilot. It currently has a rating of 2.5 out of 5, based on 16 reviews (updated 12 April 2021). Some customers reported issues with payments and transactions.
Our verdict
There is so much flexibility with Canada Life mortgage products. If you think a lifetime mortgage is a good option for you, there’s likely to be a suitable product for you from this provider.
Frequently asked questions
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