Home Finance
What is equity release?
Equity release in the form of a lifetime mortgage is a way to help boost your finances in later life by unlocking some of your home’s value without the need to sell or give up ownership of your property.
Customer documents
Equity release lets you unlock cash from the value of your home. The amount you can release depends on your age, how much your property is worth and how much you choose to borrow.
There are two different types of equity release:
- Lifetime mortgage
- Home reversion plan
We offer lifetime mortgages, but it’s important you understand the main differences:
Lifetime mortgage
A lifetime mortgage is a form of equity release; of which there are two types - lump sum and drawdown.
With a lifetime mortgage, you could access at least £10,000 in tax-free cash by securing a loan against your property. However, unlike most other secured loans, there are typically no monthly repayments for you to make – unless you wish to do so.
That’s because the loan, plus compound interest, is repaid when your lifetime mortgage comes to an end, which is typically when the last remaining applicant enters long-term care or passes away.
At this time, your home is usually sold and the proceeds of the sale are used to repay the loan, leaving any money left over to your beneficiaries.
You always retain 100% ownership of your property and it will never be repossessed, provided you follow the terms and conditions of your mortgage.
Home reversion plan
A provider buys all or part of your home from you and you can remain in your house as a tenant for the rest of your life.
You normally lose ownership of your property to the reversion company, but some allow you to retain an interest.
Is Equity Release right for me?
Is Equity Release right for me?
-
Tax-free cash
When you release equity with one of our Lifetime Mortgages, you can take a lump sum in one go or as a series of smaller lump sums when it suits you.
-
Spend it how you want
You can use the money you release for home improvements, helping children buy their first property or increase your income in retirement. It's up to you.
-
Nothing to repay
Unless you choose otherwise, there's nothing to repay until you die or move permanently into long-term care.
-
Flexible repayments
If you prefer, there's an option to repay some or all of the interest. You can also choose to repay part of the original loan.
-
Stay in your home
With equity release, you don't need to downsize and can stay in your home until you die or move permanently into long-term care.
-
You can still move house
So long as the new property is acceptable to us.
-
Inheritance protection
Part of the value of your home can be passed on if you choose our Inheritance Protection option.
-
No negative equity guarantee
Whatever happens you'll never repay more than the value of your home when it is sold - even if that's less than the amount owing. Subject to terms and conditions.
Equity Release may not be appropriate:
-
The interest can build up quickly
Any unpaid interest can rapidly build up over time. There may be cheaper ways to borrow money.
-
Reduced inheritance
Even with our Inheritance Protection option, releasing equity with a lifetime mortgage will reduce how much you can leave as an inheritance.
-
Inheritance tax
If you gift the money, the recipient may need to pay inheritance tax in the future.
-
Early Repayment Charge
If you choose to repay all or a significant part of the loan early, there may be an Early Repayment Charge.
-
Means-tested state benefits
If you're receiving certain means-tested state benefits, taking a lifetime mortgage could impact your entitlement to these benefits.
-
Higher interest rates
Usually the interest rates for a lifetime mortgage are higher than the rates charged for a traditional mortgage.
-
Repaying an existing mortgage
You may have to pay an Early Repayment Charge to your existing mortgage
Our products
At Canada Life, we provide lifetime mortgages.
Our range of mortgages let you choose how to release cash from your property. They can be used to unlock cash from your main residence with flexibility over the amount you can borrow.
The mortgages we offer allow you to make voluntary repayments each year without any early repayment charges, offering flexibility and choice.
Find out more about our lifetime mortgages and buy-to-let mortgages.
Equity Release Council
We're members of the Equity Release Council
We abide by standards that protect your interests as a homeowner to give you confidence in our products and services.
You can read more about how we work together with the Council here.
Financial advice
Releasing equity from your property is a big decision. So to make sure the choices that are right for you, we only sell our lifetime mortgage products through financial advisers.
Find an adviser
If you are considering a lifetime mortgage, it is a Financial Conduct Authority regulation that you first seek advice from a qualified equity release adviser, who will help you understand your options and advise on what is right for you. To find one, visit the Equity Release Council.
Next steps
Customer support
Find answers to commonly asked questions, helpful links, tools and contact details.
