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Second Home Options - Valerie

 

Using your properties to your advantage

Valerie:

  • 69 years old
  • Owns two properties
  • Main residence has a mortgage of £200,000
  • Second home is mortgage free
  • Wants to pay off her main residence mortgage 

Valerie has been retired for 9 years and is concerned that she won’t be able to repay her main residence mortgage when the term ends in 6 months’ time. She has a house in London, valued at £750,000, and a country cottage near Southampton valued at £450,000. 

She would like to keep both of her properties because her children enjoy spending time in both and she has strong emotional ties to the properties as a result.

Her outstanding mortgage is £200,000 and she knows that she can’t borrow money from a traditional lender because of her age. She has been made aware of lifetime mortgages and the fact that they can be taken out on primary residences and second homes.

By taking out a traditional lifetime mortgage on her primary residence, Valerie can raise £187,500, which is just under the amount she requires. She doesn’t have savings to use, so decides to take a Second Home lifetime mortgage too, allowing her to repay the £200,000 required.

Valerie was given the choice of paying off the interest and capital, or letting the interest roll-up meaning no monthly payments. She decided to let the interest roll up as having regular monthly payments felt like a commitment that could lead to stress, as she was already retired.

Key benefits:

  • Take advantage of the wealth tied up in two properties to increase borrowing potential
  • Retain both properties as assets
  • Flexibility to choose whether to make repayments

Important information

Canada Life is not responsible for the suitability of any of the statements made in the case study, or for any financial advice you receive.

Find out more about our Second Home Options.

Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority.