Frequently Asked Questions
It's important to understand all the facts before you take out a lifetime mortgage, so we've answered some of the more common questions you may have below.
This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.
What is equity release?
Equity release is a way of releasing some of the money that's tied up in your home, providing you with a cash lump sum. Aviva offers lifetime mortgages which are a type of equity release plan.
You can continue to live in your home and use the money to get more from your retirement. Whether it's to top up your income, make home improvements, buy a new car or even take a special holiday - it's up to you how you spend it.
Taking a lump sum, plus the costs, will reduce the value you have in your home, and therefore the amount of any inheritance you leave. Your tax position and any entitlement to welfare benefits may also be affected.
Equity release isn't right for everyone, so it's important to understand the features and risks.
Is equity release regulated?
Yes, equity release is regulated by the Financial Conduct Authority (FCA). This is an independent body reporting to the government that helps to ensure that financial products offered to the public are fair and meet its required standards.
Aviva is also a long-standing member of the Equity Release Council(formerly known as SHIP), a trade body set up in 1991 to help protect people taking out equity release. We adhere to the strict standards set out in their Statement of Principles.
Can you still leave an inheritance?
Although the amount of inheritance you can leave will always be reduced you can choose an inheritance guarantee on our lifetime mortgages to ensure you can leave something for your loved ones. However, this will reduce the amount of money you can borrow and may affect the interest rate charged. Find out more about our lifetime mortgage inheritance guarantee.
Are you eligible for a lifetime mortgage?
Lifetime mortgages are available to homeowners aged 55 and over. The amount you can release will depend on a number of factors including your age, value of property and type of property.
You may be able to borrow a higher loan amount on the Lifestyle Lump Sum Max plan if you have certain health or lifestyle conditions.
Does your home qualify?
Your home may qualify for a lifetime mortgage if it is a residential property of standard construction in England, Wales, Scotland or Northern Ireland.
Please bear in mind that minimum property values apply. We are not able to offer lifetime mortgages for properties in the Isle of Man or the Channel Islands.
Lifetime mortgages are not offered for the following property types: freehold flat or maisonette (except in Scotland), studio or basement flat, flat or maisonette in a local authority or housing authority block of more than four storeys, mobile home or houseboat, farm, hotel, retirement properties, guest house or B&B.
How much equity can you release?
This depends on a number of factors including the value of your home and your age when you start the plan.
If you have certain medical conditions, you may be able to borrow a higher proportion of your property's value, or may benefit from a lower fixed interest rate.
For a general guide on how much you may be able to release from your home please use our equity release calculator.
Will you still own your own home?
Yes, you're still the legal owner of your home and you can stay in it until you die or need to go into long-term care, subject to our terms and conditions.
How flexible are lifetime mortgages?
With a lifetime mortgage you may be able to release more in the future. You will be able to move home, subject to our lending criteria at the time, but if you move to a property of lower value, you may have to pay back part of the lifetime mortgage.
Are there valuation and legal fees to pay?
The arrangement fee is deducted from the amount you receive. However, you will be required to pay the costs of a solicitor acting on your behalf. You will also have to pay a fee for an independent valuation of your home, which we will arrange.
For more information about our fees, please read our Tariff of Charges.
What interest rate will be applied?
Our lifetime mortgage interest rates are based on your individual circumstances. This will be given to you in your personalised illustration.
Because you don't make any payments during the term of the mortgage, a higher interest rate is applied to it than a standard mortgage.
What are my responsibilities?
You must maintain the property and keep it in good repair. The property must also be insured and you must pay all property-related bills, such as council tax and utility bills. The property also needs to remain your main residence.
Can you repay the lifetime mortgage early?
Yes, but you should remember that a lifetime mortgage is a long-term commitment, designed to last until you die or move into long-term care.
Repaying your loan in full before then could mean you have to pay early repayment charges.
For new customers from 28th April 2014, once you've had your lifetime mortgage for one year, you can make voluntary partial payments, with no early repayment charge. The maximum you can pay back each year is 10% of the amount borrowed. You can repay in up to four installments a year, and the minimum you can pay in each installment is £500.
What is the tax position?
You don't have to pay tax on the money we loan you. However, if you put money in a bank or building society account, you may have to pay tax on any interest you earn.
Will this affect my benefits?
The loan could affect your entitlement to welfare benefits, such as council tax benefit, pension credit and certain health benefits.
Lifetime mortgages are not available in the Channel Islands and Isle of Man.