Aviva equity release

Established in 1998, Aviva have become a household name in the UK. Much of their appeal comes simply from the recognisability of their brand. With over 31 million customers across the globe and over 200,000 mortgages provided, Aviva have set themselves up as a well-established contender in providing competitive equity release options.

Like most other providers, they are members of the Equity Release Council, which means they have a ‘No Negative Equity’ guarantee preventing the amount owed on the loan from ever exceeding the value of the property itself.

What do they offer?

In order to qualify for equity release plans from Aviva, you must:

• Be over 55 years old.
• Pay off any remaining mortgage payments (if any) with the cash released with the loan.
• Have a freehold property in the UK valued at over £75,000 as your primary residence. Or a leasehold property with 160 years left on the lease.

Aviva have two main equity release options which are as follows.

Lifestyle Lump Sum Max

This is the simpler option of the two. It is designed for you to borrow a single lump sum of cash. The minimum loan amount available is £15,000 with a maximum depending on various factors surrounding yourself and the property in question.

This loan can be paid back up to 10% annually, after the initial twelve-month period. Early repayment charges will apply.

Lifestyle Flexible

This second plan is designed to be more flexible, as it claims in the name. The minimum initial borrow is lower at only £10,000 but then you can hold a further minimum of £5,000 in reserve to be withdrawn at a later date. The advantage of this plan is that, while you do not receive as much money from the loan initially, the money sat in reserves does not accrue interest until you decide to take it out.

This is a useful plan if you need an initial influx of cash with the knowledge that more will be needed down the road; for example, with medical expenses. The interest rates will vary, however, based on an assessment of your own health and lifestyle.

This loan can also be paid back up to 10% annually after the initial twelve-month period with the possibility of early repayment charges being applied.

The universal offerings

Both of these schemes come with:

• A ‘No Negative Equity’ guarantee. As stated before, as members of the Equity Release Council, Aviva do not allow the money owed to ever exceed the value of the property out of which the loan has been taken.
• An inheritance protection plan. This allows you the option of setting a certain percentage of the property’s value aside as inheritance. While equity release will drastically reduce the amount of inheritance someone could receive on the property, this protection plan does allow them a segment at least.
• The option to release more money in the future, if the value of the house increases.
• Fixed interest rates.
• The option to transfer the plan to a different property should you choose to move to a new house which fulfils Aviva’s requirements.

Are these good deals?

With low bars to entry and relatively low interest rates, Aviva are a good candidate for many looking to take out an equity release plan. Their track record of providing mortgages has won them multiple awards including What Mortgage’s ‘Best Equity Release Lender’ in 2016 and the ‘Best Equity Release Lender’ Personal Finance Award in 2015/16.

While equity release plans are now significantly safer than they were before due to new regulations – which Aviva adhere to – there are still some concerns. While these plans do unlock a trove of otherwise inaccessible cash, they do so at a cost. The interest rates in question are high and will take a large chunk of inheritance away from anyone looking to receive the property after you pass away, even with the inheritance protection option.

Aviva Equity Release Plans

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Aviva Equity Release Calculator

By looking on Aviva’s website you can find their equity release calculator. If you enter your age and the value of your property, Aviva will give you a rough estimate of how much cash you are able to release through their plans.

That said, these numbers should not be treated as an actual offer but instead just a vague indication of how much could be available.

Right for you

Like several other lenders Aviva do not offer their equity release plans to the general public. In order to access them you must go through a financial advisor who will assess your own personal financial situation and give you advice on which lender best suits your needs.

Therefore, it is absolutely vital that you do not base any decisions about equity release plans on broad ratings but instead thoroughly research each plan individually, with the assistance of a financial advisor, to find the plan that best suits your lifestyle, needs, and current financial situation.