Equity Release

You'll want to understand all the facts about equity release before you take out your plan. Whilst one of our advisers will explain these to you during your appointment, we've answered some of the more common questions below:

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.

You can continue to live in your home and use the money to get more from your retirement. Whether it's for a new car, home improvements, a special holiday or simply to top up your income–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 value of any inheritance you leave. Your entitlement to tax and welfare benefits may also be affected.

Are you eligible for an equity release plan?

Equity release is available to homeowners aged 55 and over. The type of plan available to you and the amount you can release will depend upon your age, gender and property value. Minimum property types also apply.

Find out if you could apply for equity release here.

Does your home qualify?

Your home may qualify for a lifetime mortgage or home reversion plan if it is a residential property of standard construction in England or Wales. Lifetime mortgages are also available for such properties in Scotland and Northern Ireland.

Please bear in mind that minimum property values apply. We are not able to offer equity release for properties in the Isle of Man or the Channel Islands.

The home reversion plan is not offered for the following five property types: flats, retirement properties, sheltered accommodation, new build properties (where the developer is still on site) and ex–local authority properties.

How much equity can you release?

This depends on the type of plan you take out. The amount you can borrow through a lifetime mortgage is based on the value of your home and your age when you start the plan.

With a home reversion plan, you can choose to sell up to 100% of your home. However, because you can still live in your home rent–free until you die or go into long–term care, you'll receive less than the full market value of the share of your property that you sell.

Will I still own my own home?

With the lifetime mortgage, you keep ownership of your home. With the home reversion plan, the ownership of your home is transferred to the reversion provider, Grainger plc.

Both types of equity release plans offered by Aviva allow you to continue living in your home until you die or need to go into long–term care.

How flexible are equity release plans?

With a lifetime mortgage you may be able to release more in the future, depending on the lending criteria at the time.

With a home reversion plan, if you sell less than 100% of your home to the reversion provider, Grainger plc, will guarantee to buy further shares from you as long as you meet the conditions of the plan.

Both products allow you to move home, subject to your new property meeting our conditions at the time.

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 a valuation fee up front. You can speak to one of our advisers to find out more.

What interest rate will be applied?

A lifetime mortgage has a higher interest rate applied to it than a standard mortgage, because you don't make any payments during the term of the mortgage. You can find out more about the current interest rates and APRs for each of our lifetime mortgages.

There aren't any interest rates with a home reversion plan because it's not a loan – you sell all or part of your property at the outset of the plan to release the capital. One of our advisers will be able to help you decide which plan best suits your personal circumstances.

Are you still responsible for maintaining the property and paying bills?

Yes, the equity release plans offered by Aviva require you to maintain your property and keep it in a state of good repair. It's also still your responsibility to insure your property and pay all your property–related bills, such as utilities and council tax.

Can you end the plan early?

Both the lifetime mortgage and the home reversion plan are intended to last for the rest of your life.

With a home reversion plan you can buy back the provider's share of your property, but you will have to pay the full market value, which is likely to be substantially more than the amount you received from the sale.

With a lifetime mortgage the lender does not receive any payment until the property is sold, so if you decide to repay the loan early there may be a substantial early repayment charge.

Are there any tax implications?

It's important to understand that taking out an equity release plan will reduce the value in your home and therefore the inheritance you leave. You don't have to pay tax on the amount you release, but it may affect your entitlement to tax and means–tested benefits.

Is equity release regulated?

Yes, the equity release plans offered by Aviva are regulated by the Financial Services Authority (FSA). This is an independent body reporting to Parliament that helps to ensure that financial products offered to the public are fair and meet its required standards.

Aviva is also a member of Safe Home Income Plans (SHIP), a voluntary organisation that specialises in equity release, and we adhere to the strict standards set out in their code of practice.

How can you be sure if it's right for you?

With our choice of equity release plans, we aim to offer you a solution that fits your personal circumstances. Even so, we recognise that equity release isn't for everyone. So, we'll take the time to listen to your needs and concerns and if we think it's not right for you, we'll tell you.

Talk to one of our advisers

Our expert advisers can answer your questions and give you all the information – and thinking time – you need. Simply book an appointment and one of our advisers will visit you at home to talk you through all the facts about equity release and the options open to you. Please note, we can only advise on products sold and marketed by Aviva.

This is a lifetime mortgage or home reversion plan. To understand the features and risks, ask for a personalised illustration.

Aviva Equity Release UK Limited. Registered in England No 3286484. Registered office 2 Rougier Street York YO90 1UU. Authorised and regulated by the Financial Services Authority.

WC07048 07/2009