Article date: 22 May 2014
Aviva has gone live with enhancements to its equity release lifetime mortgages to provide customers with flexible features that allow them to repay or reduce their loans, free of early repayment charges.
The enhancements reflect the evolving equity release market, with retirees now seeking increased flexibility and choice in how they access the value in their homes. Property is a key asset for retirees with 76% of over-65s owning their homes outright and more people entering retirement mortgage free*. The average age people take out an equity release product with Aviva is 70 years.
Aviva’s Equity Release Lifetime Mortgages provide loans of at least £15,000, through the following options:
- The lifestyle lump sum max – providing a one-off lump sum.
- The lifestyle flexible option – providing a lump sum, with a cash reserve to drawdown when needed.
Aviva has made the following changes**:
- 1. Early repayment charges (ERC) exemptions
Aviva has introduced ERC exemptions, allowing new customers with a joint lifetime mortgage to repay the mortgage without any repayment charges, within three years of one of the customers passing away or the date Aviva is notified that one of the couple needs long-term care.
- 2. Voluntary partial repayments
A voluntary partial repayment feature, free of early repayment charges has also been introduced. This enables new customers to make repayments once they have held the lifetime mortgage for a year. Customers can repay up to 10% of the initial amount they have borrowed in four instalments each anniversary year, with a minimum of £500 for each instalment.
Sales across Aviva’s equity release products have been steadily increasing as more people turn to their property to release funds. The average initial loan taken from Aviva’s lifestyle flexible option, the most popular of the equity release products, increased from £25,000 in 2010 to £44,000 in 2013, with a sizeable reserve still available to draw from.
Clive Bolton, Aviva’s managing director, retirement solutions, said:
“We have designed our equity release products to be more flexible as people are increasingly choosing to draw on their housing wealth in retirement. Equity release can be used for a variety of purposes, and can be particularly useful where retirees are finding their savings are dwindling or when they have a significant and unexpected expense to meet.
“With the enhancements we’re making, retirees can start paying back their loan if their circumstances change and have more control of how they utilise their overall wealth.”
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If you are a journalist and would like further information, please contact:
Diane Mangan : Aviva Press Office : 01904 684164 : (mobile number) : 07800 691714
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Notes to editors:
* Data from the Aviva Real Retirement series – Spring 2014.
** The changes went live from April 28, 2014.
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