Aviva entered the equity release marketplace in 1998 by providing retirement solutions for people over the age of 55 & owned their main residence. Today the company has helped over 198,000 retirees release over £7billion of equity from their homes. One option available to retirees is the Lifestyle Flexible Plan. It is an interest only lifetime mortgage, which adheres to all Financial Conduct Authority regulations and the Equity Release Council Code of Conduct standards.
Lifestyle Flexible Option
For this page, the Lifestyle Flexible Option is an interest only plan; however, Aviva also allows this product to be built in a way that meets industry demands. For this reason a homeowner can make it an interest only lifetime mortgage with a drawdown feature or a lump sum payment. It does come with specific qualifications that differ from other products on the market.
If the full amount of funds are not taken then a cash reserve facility will be set up. The cash can be withdrawn at any point in the future to ensure the homeowner has a loan that fits their needs. If there is a cash reserve facility a homeowner must make subsequent withdrawals for a minimum amount of £2,000. Additionally, the minimum amount to be taken on the initial withdrawal is £10,000.
To meet industry demands the Aviva Lifestyle Flexible Option comes with an option for inheritance protection. This guarantee ensures the total loan to value percentage plus accruing interest will not touch the percentage of equity set out specifically for inheritance. The loan also has a no negative equity clause so Aviva cannot seize any other assets other than the home to pay the interest and capital in full.
With the drawdown option, interest is paid on the funds used not what is available in the cash facility. Interest payments must be made each month unless the homeowner decides to roll-up the interest at a later date.
Qualifications and Other Criteria
The youngest homeowner must meet the minimum age requirement, which is at least 55. The property value must also be a minimum of £75,000 to qualify for the lifetime mortgage. The minimum property value is slightly higher than other interest only flexible plans on the market.
As a flexible plan, Aviva offers a voluntary repayment option with this loan. Standard repayment is at the time of death or when there is a move to assisted living. As an interest only product at least £25 per month must be repaid in interest unless the homeowner decides to roll over the mortgage at age 80 or above into a roll-up scheme.
For the voluntary repayment option, homeowners can repay up to 10% per annum of the capital and interest. This lowers the repayment at the end leaving more inheritance for beneficiaries.
The amount of equity left in the home is based on the inheritance protection and repayments made. It is possible to repay the entire loan amount within 15 to 16 years if repaying 10% per annum and without any penalty fees attached.
Aviva provides a free valuation option plus up to £1,000 cash back. Aviva also provides enhanced rates, 10% flexible repayment option with no early repayment charges.
*£5 Application Fee available until further notice
This quote assumes a male age 62, living in BS11 with a property valued at £215,000 releasing £32,000 initially with £15,150 in a cash reserve.