Canada Life has launched a new equity release product with greater flexibility for borrowers.
Capital Select Lite is the latest option in the Capital Select range. The new Lite option has an annual interest rate of 3.86 per cent, compared with 4.35 per cent for Capital Select Gold.
The range allows customers to make payments up to a maximum of 10 per cent of the initial loan amount each year, without incurring an early repayment charge.
Borrowers can also add a cash reserve facility to their mortgage.
The new Lite product comes with lower maximum loan-to-values than other options within the range, for example LTV is capped at 23 per cent for a customer aged 70.
A maximum of £1 million can be taken out against a property’s value, but the lender will consider higher amounts on a case-by-case basis.
Head of marketing Alice Watson says: “Canada Life is committed to meeting the needs of customers in the home finance market, and the launch of our new Capital Select Lite option is the latest evidence of this.
“Customers are keen for a lifetime mortgage product that offers them flexibility and greater control over how, when and if they repay their loans.
“However, they want one at a rate closer to the most competitive offers currently on the market for equity release products.
“Capital Select Lite delivers exactly that.
“It offers a low rate to homeowners over 55 who are looking to draw on their property value, and also leave their options open to pay down the mortgage should their circumstances change.”
Canada Life also announced that the LTV rate would no longer differ for sole or joint borrowers on its Lifestyle Platinum and Lifestyle Platinum Cashback options as both are now set at 42 per cent for customers aged 70.
The changes mean that joint borrowers now have access to a higher LTV for the Lifestyle Platinum products, allowing them to take out more equity should they wish to.
All Canada Life Lifetime Mortgage products come with an optional inheritance guarantee and have a no negative equity guarantee.