Aviva are the largest provider of equity release schemes in the UK. Formerly Norwich Union, Aviva Equity Release have been providing lifetime mortgages since 1998 & have now helped over 198,000 in releasing tax free cash from their home. Offering both drawdown lifetime mortgage & lump sum options; the two plans currently available are the Lifestyle Flexible Option & Lump Sum Max Plans.
How does the Lifestyle Flexible plan meet interest only lifetime mortgage demands?
The Aviva Flexible Lifetime Mortgage is in essence a roll-up lifetime mortgage plan, however Aviva have built-in flexibility by allowing the planholder to have the ability to make voluntary repayments of capital of upto 10%pa of the original amount they borrowed. This can be achieved without incurring any penalties.
Therefore, following receipt of their Aviva equity release annual statement, an amount equivalent to the interest being charged by Aviva over the previous 12 month period can be repaid. This will effectively reduce the equity release balance back to the original amount borrowed & can be maintained for the rest of the life of the plan if so required.
The Aviva Flexi Lifetime Mortgage isn’t a traditional monthly interest only mortgage as there is no facility to make monthly repayments. However, Aviva do allow upto four payments per annum, with a minimum amount of £500. Therefore, for retirees requiring the flexibility of repayment & control over when they make the repayments, this Aviva does tick many boxes.
Additionally, Aviva have no income verification requirements at application stage, which avoids issues with MMR which was introduced in April 2014. For all the above reasons of flexibility, repayment with no penalty & a low fixed interest rate for life, the Aviva Lifetime Flexi plan is proving extremely popular.
Qualification and criteria
Aviva’s Flexible Lifetime mortgage plan starts from age 55 and is available in the UK – including England, Scotland, Wales & Northern Ireland. There must be a minimum property value of £75,000 with an initial minimum withdrawal limit of just £10,000. Available on both a single & joint life basis, the youngest applicant must have attained the age of 55, with no upper age limit.
The Flexi Lifetime Mortgage is a form of drawdown equity release scheme whereby Aviva will calculate the maximum equity release possible based on age & property value. From this figure, the homeowner can take an initial capital sum, with any amount remaining being kept in a cash reserve facility with Aviva. Subsequent withdrawals can then be made from this reserve in minimum amounts of £2,000 a time & with no additional administration fees.
Aviva Equity Release features and incentives
Aviva are unique in the sense they have developed a Flexi calculation tool which selected equity release brokers have access to. This allows for the equity release lump sum calculation & the design of the plan around the homeowners needs. Therefore, all additions or reductions in features such as size of drawdown or initial release taken can duly affect the fixed interest rate.
Included in the list of options Aviva provide these equity release brokers is the possibility of having a free valuation, £0, £500 or £1,000 cashback for the consumer. All these additions will have a bearing on the equity release interest rate & must therefore be achieved following lengthy discussions with your Interest only lifetime mortgage adviser.
Aviva does also include an Inheritance Protection Guarantee Option whereby the homeowner can actually state from outset how much of the property they wish to protect & therefore guarantee an inheritance for their beneficiaries. This is in addition to the no negative equity release guarantee on plans such as this which are part of the Equity Release Council.
The final feature which could have an effect on the interest rate is whether the homeowner has suffered from ill-health at any time. The reason being is that Aviva equity release will take into account the health of the individual by completing a Health & Lifestyle Questionnaire. Following completion of this & establishing a qualified illness, Aviva can reduce the interest rate of the plan. This can be an important call as the lower the interest rate, the less that will need to be repaid back to Aviva on a yearly basis.
* £5 application fee applies to application received until further notice.
**Free valuation offer applies to properties worth upto £1,000,000
**Interest rates with the Aviva Lifestyle Flexi plan are dependent upon personal criteria, location and options selected.
For a free information pack on the Aviva Flexible Lifetime Mortgage offering an interest only lifetime mortgage basis, please call the Interest Only team on 0800 689 0925.
The rate published assumes male age 62, living in BS11 with a property valued at £215,000 releasing £32,000 initially with £15,150 remaining in a cash reserve facility