Canada Life Home Finance has launched Capital Select Lite, which offers a lower rate for low loan-to-value borrowers.
The option offers a rate of 3.86%, compared with 4.35% for Capital Select Gold, though customers over the age of 70 must have an LTV below 23%.
A maximum of £1m can be taken out against a property’s value, while Canada Life will consider bespoke arrangements for those wishing to draw in excess of that amount.
Alice Watson (pictured), head of marketing and communications at Canada Life Home Finance, said: “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: the best of both worlds.”
Canada Life’s Capital Select Options range allows customers to make payments from anywhere between £50 up to a maximum of 10% of the initial loan amount each year, without incurring an early repayment charge (ERC).
Customers can also choose to add a cash reserve facility to their mortgage.
Canada Life also announced that the LTV rate will no longer differ for sole or joint borrowers on its Lifestyle Platinum and Lifestyle Platinum Cashback options, now both set at 42% 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. There is no penalty in the event that the offered facilities to pay down loans are not used.