Canada Life reports Advantage customers average 66, against 69 for Capital Select
Customers of Canada Life's interest-serviced lifetime mortgage, Advantage, are younger than those on its roll-up range, the lender's data show.
The average Advantage customer is 66, compared with 69 for customers of its Capital Select range. The analysis covers the first six months after Advantage launched in February. The data run to Aug. 31.
The average loan-to-value on Advantage lending is 24%. Joint applications account for 51% of Advantage borrowing, against 39% for Capital Select.
More than eight in 10 Advantage customers (86%) chose to service 100% of monthly interest, the option with the highest rate discount. Just 1% chose the lowest option of 25%.
Reasons for borrowing
Nearly half of Advantage customers (48%) used the funds to repay an existing mortgage. Fewer than three in 10 Capital Select customers did so.
Debt consolidation was cited by 31% of Advantage customers, compared with under a quarter of Capital Select customers. Day-to-day living costs were the reason for 9% of Advantage customers and 27% of Capital Select customers. Holidays were cited by 9% and 23%, respectively.
How the product works
Canada Life launched Advantage on Feb. 26. Borrowers can service 25%, 50%, 75% or 100% of monthly interest, with the discount rising in line with the proportion paid.
The range follows Equity Release Council standards. Borrowers can also make voluntary repayments of up to 10% of the initial loan a year without early repayment charges. Customers who downsize after three years pay no early repayment charge, the lender said.
Joint borrowers pay no early repayment charge if they repay within three years of the first borrower's death or move into long-term care. The range also includes an inheritance protection guarantee, Canada Life said.
Later life market backdrop
The Equity Release Council reported total lending of £597 million in the second quarter, up 4% from the first quarter. Customer numbers rose 4% to 13,489, including 5,307 new customers. Lending and overall customer numbers remained below second-quarter 2025 levels.
David Burrowes, chair of the council, said customers increasingly want "flexibility, choice and the ability to tailor borrowing around changing circumstances."
UK Finance said 5,730 new lifetime mortgages were advanced in the second quarter. That was down 1.7% year on year and up 8% on the first quarter. The lending was valued at £490 million. It also reported 323 retirement interest-only (RIO) mortgages, up 5.9% year on year, worth £31 million. UK Finance cautioned that annual comparisons reflect a temporary dip in activity after the April 2025 stamp duty changes.
The FCA is running a market study into lifetime and RIO mortgages, with interim findings due in the fourth quarter. Its terms of reference say more than 90% of lifetime mortgage customers used an intermediary over the past three years.
The regulator's data put the median age of lifetime and RIO borrowers from 2022 to 2025 at around 71. Median loan-to-value for lifetime mortgages was around 15%. The FCA also noted that some lifetime mortgages now allow optional interest payments, including regular instalments.
Alice Watson, head of home finance at Canada Life, said interest-serviced products are "attracting younger, low loan-to-value borrowers with strong payment discipline."
She said a traditional roll-up lifetime mortgage with ad hoc repayment options will remain a better fit for other borrowers. She said continued product innovation is critical to support a wider range of retirees.
