Canada Life has lowered the interest rate and increased the maximum loan-to-value (LTV) for its buy-to-let and second home products.
The annualised interest rates for Canada Life’s buy-to-let Lifestyle and buy-to-let Voluntary Select products have reduced from 6.16% and 6.36% to 5.78% and 5.98% respectively.
Landlords and property owners over 55 can also benefit from a 5% increase to the maximum LTV for Canada Life’s buy-to-let and second home products. The LTV for customers aged 55 will increase to 19%, while those aged 70 will be able to apply for a maximum of 34%, which increases to 44% for customers aged 80 and over.
LTVs for Canada Life’s buy-to-let and second home product increase 1% for each year of the age of the borrower. The LTVs are capped at age 80, but lending is allowed up to 90.
Canada Life says its buy-to-let products allows landlords aged 55 and over to release their property wealth tax-free, while leaving their portfolio intact and letting them continue to draw on the rental income.
Alice Watson, head of marketing and communications at Canada Life Home Finance, said: “We know that property wealth increasingly plays a key role in supporting homeowners’ retirement lifestyles. These latest product changes are part of Canada Life’s ongoing commitment to deliver greater flexibility and certainty to our customers at competitive rates.
“Our customer data shows that people use our buy-to-let products for a range of reasons, from increasing their retirement income to paying for care fees. Landlords aged 55 and over can experience real peace of mind, knowing that there are no affordability assessments, no minimum income requirements and a fixed interest rate for life.”
Canada Life has also lowered its interest rates for its Second Home Lifestyle and Second Home Voluntary Select products, which have also reduced from 6.16% and 6.36% to 5.78% and 5.98% respectively.
Watson added: “Regular market innovation has seen the number of later life lending products more than double in the space of a year. This has given property owners the flexibility to tap into their property wealth just as easily as their pension pot or savings, helping bring it into mainstream financial planning.”
Will Hale, CEO at Key, added: “The announcement today from Canada Life regarding its second home and buy-to-let product enhancements comes on the back of continual developments in the later life lending market. With increased customer interest in this sector, lenders are able to create new and innovative products to suit ever-evolving customer needs.
“More and more people own second properties either as holiday homes or investments so products which allow people to tap into their value are very welcome. Increasingly, I believe that you will see lenders looking beyond simply providing equity release products and rather find that they are considering innovative ways to help people either via product features or increased flexibility. The market is evolving and growing with its customers and these product enhancements are a clear indication of how this is happening.”
