New Canada Life data shows Advantage customers are attracting a distinct customer profile
New data¹ from Canada Life reveals that its interest-serviced lifetime mortgage product, Advantage, is attracting a distinct borrower profile compared to its traditional roll-up lifetime mortgage products.
Launched in February this year, Advantage offers customers a discounted interest rate when they commit to making regular monthly interest payments. Customers can choose to pay 25%, 50%, 75% or 100% of their monthly interest, with the discount increasing in line with the proportion serviced.
Analysis of Canada Life Home Finance customer data from the first six months following launch shows that Advantage customers are typically younger than those opting for a lifetime mortgage without an interest-servicing option, such as Canada Life’s Capital Select range. The average age of an Advantage customer is 66, compared to 69 for its Capital Select customers.
The data also indicates a strong commitment to servicing interest. More than eight in ten Advantage customers (86%) have chosen to service 100% of their monthly interest, securing the highest available rate discount. In contrast, just 1% selected the lowest interest-servicing option of 25%.
With an average loan-to-value of 24%, Advantage customers are retaining a significant proportion of equity in their homes. They are also more likely to apply jointly, with joint applications accounting for 51% of Advantage borrowing compared to 39% of Capital Select customers.
The reasons for taking out an Advantage lifetime mortgage also suggest that customers are using the product more as a structured financial planning tool rather than for discretionary spending.
Nearly half of Advantage customers (48%) used the funds to repay an existing mortgage, compared with 28% of Capital Select customers. Debt consolidation was the second most common reason, cited by nearly a third (31%) of Advantage customers, compared with under a quarter (23%) of Capital Select customers.
By comparison, just 9% of Advantage customers used the loan for day-to-day living costs, versus 27% of Capital Select customers. Holidays were also less commonly cited, at 9% for Advantage customers compared with 23% for Capital Select customers.
|
Reasons |
Advantage |
Capital Select |
|
Clear existing mortgage |
48% |
27% |
|
Consolidate debt |
31% |
22% |
|
Day to day living |
9% |
27% |
|
Holidays |
9% |
23% |
Alice Watson, Head of Home Finance, Canada Life said:
“We can see from the first six months of Advantage data that interest-serviced lifetime mortgage products are attracting younger, low loan-to-value borrowers with strong payment discipline.
“For some, the certainty of regular interest payments and a lower rate will be the right choice. For others, the flexibility offered by a traditional roll-up lifetime mortgage with ad-hoc repayment options will remain a better fit.
“As customer needs evolve, continued product innovation is critical for the lifetime mortgage market to develop and support a wider range of retirees. Providing advisers and their clients with a broader range of solutions means greater choice for homeowners looking to use their property wealth to sustain their retirement income and achieve greater financial flexibility in later life.”
-ENDS-
Notes to editors
Canada Life Home Finance customer data between 25/02/2025 - 31/08/2026
Enquiries:
Press enquiries should be directed to:
Katie Ormrod, Canada Life, +44 7834 740227, katie.ormrod@canadalife.co.uk
About Canada Life:
Canada Life is part of a group of companies controlled by Great-West Lifeco Inc., a Canadian headquartered, international financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses. Through its subsidiary companies, Great-West Lifeco operates in Canada, the United States, and Europe. Great-West Lifeco trades on the Toronto Stock Exchange under the ticker symbol GWO and is a member of the Power Corporation group of companies.
Canada Life Limited began operations in the United Kingdom (UK) in 1903 and provides UK individuals and businesses with a range of retirement, investment, insurance and wealth solutions. Canada Life offers individual annuities, pension de-risking solutions, home finance, estate planning and investment options, and workplace protection products.
Canada Life Limited (no.973271) is registered in England and Wales, authorised by the Prudential Regulation Authority, and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Stonehaven UK Limited (no.05487702), trading as Canada Life, is registered in England and Wales and is authorised and regulated by the Financial Conduct Authority. Canada Life International Limited (no.033178C) and CLI Institutional Limited (no.108017C) are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority. Canada Life International Assurance (Ireland) DAC (no. 440141) and Canada Life International Assurance (Ireland) DAC are authorised and regulated by the Central Bank of Ireland.
Canada Life Asset Management Limited, registered in England and Wales with registration no. 3846821. Registered office: Level 37, 22 Bishopsgate, London EC2N 4BQ. Canada Life Asset Management Limited is authorised and regulated by the Financial Conduct Authority.
Please note that while Canada Life Limited and Canada Life Asset Management Limited are regulated as stated above, property management and the provision of commercial mortgages are not regulated activities.