Equity Release

Frequently asked questions

What types of equity release plans are there?

There are two types of equity release plans: home reversion (though far less common nowadays) and lifetime mortgages.

The equity release option we offer is a lifetime mortgage.

Our lifetime mortgage, Lifestyle Flexible Option, offers you the option of either taking a one-off cash sum or taking a one-off cash sum and setting up a cash reserve to draw money from in the future.

To find out if you can get a lifetime mortgage with us , call us on 0800 141 3493 or request a call back. You’ll be able to talk through your options without committing to anything.

And you don’t need to worry about paying a separate advice fee. If you decide to go ahead, we’ll make a commission payment to the adviser once your loan is set up instead.

How does a lifetime mortgage work?

A lifetime mortgage is a type of equity release that allows you to access some of the equity that’s tied up in your home. It’s a long-term loan that’s secured on your property.

Even though it’s a mortgage, you don’t have to make regular repayments. The loan and interest will be paid back in full, usually by selling your property when you (and your partner if it’s a joint lifetime mortgage) die or move into long-term care (remember – Subject to our terms and conditions).

When you borrow money, you are charged interest not only on the initial borrowed amount but also on any interest that has already accumulated. This means that the total amount you owe grows rapidly over time because interest is continuously being added to both the principal amount and the existing interest. Taking out a lifetime mortgage will reduce the amount of inheritance you are able to leave and may affect your tax position and eligibility for welfare benefits.

Am I eligible for a lifetime mortgage?

To qualify for equity release, you and any other borrower must meet specific criteria outlined by us. Applicants must be at least 55 years old, own a UK home (excluding the Isle of Man or the Channel Islands) valued at £75,000 or higher, and desire to borrow a minimum of £15,000. Additionally, borrowers must either be mortgage-free or have the capability to settle any remaining mortgage balance using the borrowed funds. For more details, visit our equity release eligibility page.

How much money could I release from my home?

You’re three steps and two minutes away from an estimate. Answer a few questions about you and your home, and our equity release calculator will do the rest.

Is equity release safe?

Yes. Equity release is regulated by the Financial Conduct Authority (FCA).

The FCA is an independent organisation and it reports to the Government, helping to make sure that financial products offered to the public are fair and meet certain standards.

We’re a long-standing member of the Equity Release Council – an organisation set up in 1991 to help protect people taking out equity release. We make sure we meet the standards set out in their Statement of Principles.

Answering equity release concerns.

How long does equity release take to arrange?

You’ll need to get legal and financial advice when you take out equity release, so the time it takes to finish your application can vary. Typically, once we get your lifetime mortgage application it takes about 8-12 weeks before you get your money.

Find out more about equity release.

How does equity release affect benefits?

Taking out a lifetime mortgage will reduce the amount of inheritance you are able to leave and may affect your tax position and eligibility for welfare benefits.

It might affect your entitlement to means-tested welfare benefits, like council tax benefit, pension credit, and certain health benefits. But your adviser will understand your personal situation and can explain this to you.

Find out more about equity release.

Can I use equity release to buy another property?

Yes, as long as the new property is your main residence and meets our property lending criteria at the time.

Read more about buying another property using equity release.

Can I move house with equity release?

If your new property that you are moving to meets our lending criteria at the time and we agree that you can, then you can happily move house and take your lifetime mortgage with you when you go.

If your new home is worth less than the current one you may need to pay back some of the loan and interest. And if your new property doesn’t meet our lending criteria, you might be able to use downsizing protection – your adviser will be able to tell you if you’re eligible. Downsizing protection means you’ll be allowed to repay the lifetime mortgage with no early repayment charge. Once you've repaid your lifetime mortgage, then the loan is closed and you can buy your new property. Downsizing protection is available on lifetime mortgages applied for on or after 8 April 2019. Terms and conditions apply.

If your new property doesn't meet the lending criteria and you’re not eligible for downsizing protection, you might not be able to move to this specific property.

Find out more about equity release.

Do you have the deeds to my property?

Each lifetime mortgage is different so please call us to check on 0808 239 4531

Find out more about equity release.

What’s the interest rate?

There's no set figure.

Our lifetime mortgage interest rates are based on your individual circumstances such as your age, property value, health and lifestyle details, and how much cash you’d like to release. When you speak to an equity release adviser, they’ll arrange to give you a personalised illustration which will show you your interest rate.

Unlike a regular mortgage, you don’t make any monthly repayments with a lifetime mortgage. So, they have a higher rate of interest which builds up on your loan each year. Interest is charged on the total borrowing and any interest previously added, which quickly increases the amount you owe (compound interest).

We add the compound interest to your balance once a year.

Find out more about equity release.

Are there any fees?

Your equity release adviser will give you a personalised illustration of how your lifetime mortgage will work, and that’ll show you any fees you need to pay. You can also get a copy of our equity release Tariff of Charges from your equity release adviser, by visiting www.aviva.co.uk/adviser/documents/view/pf01459c.pdf, or calling 0800 141 3493.

Can I take out more later?

You might be able to borrow more later if your home goes up in value or you don’t borrow the full amount that’s available to you at the start, subject to our lending conditions at the time. The interest rate is calculated on any extra amount that’s released when we get your application.

The terms and conditions that apply to any additional borrowing will be the ones applicable at the time – they might be different from those that applied to your previous borrowing.

Find out more about equity release.

Do I still own my own home?

Yes, and you continue to live in it until you die or go into long-term care, subject to our terms and conditions. You need to make sure that you keep the property in good shape, and it’s still your responsibility to insure your property and pay any bills, like utilities and council tax – in the same way you do now.

Find out more about equity release.

Can I end the lifetime mortgage early?

Our lifetime mortgages are designed to last for the rest of your life, so it might not be right for you if you’re planning to pay it off early.

You can end your lifetime mortgage early by paying off the loan and the interest, but you might have to pay a substantial early repayment charge to do so. We offer fixed percentage or gilt index early repayment charges, and you have to choose one when you set up the lifetime mortgage. If you want some more information about how our early repayment charges work, we have a booklet about each.

You can get a copy from your equity release adviser, by giving us a ring on 0800 141 3493, or downloading your own copy from our website:

For gilt index early repayment charges explained visit www.aviva.co.uk/adviser/documents/view/pf011612c.pdf

For fixed early repayment charges explained visit www.aviva.co.uk/adviser/documents/view/pf011601c.pdf

What happens when it’s time to sell the house?

A lifetime mortgage can be repaid in any way really, but it’s usually using money from selling the property. If you go into long-term care, then either you or your solicitor sells the house. If you die and have a Will in place, it'll be sold by an executor looking after your estate – if there's no Will, administrators will sell it. Any money that’s left over after the lifetime mortgage has been repaid belongs to you or your estate.

Find out more about equity release.

Where can I get independent guidance?

The Equity Release Council champion high standards and safeguards for equity release customers. And, as a long-standing council member, we’re committed to these values too.

You can contact the Equity Release Council by calling 0844 669 7085 or visiting their website https://www.equityreleasecouncil.com/

MoneyHelper is an independent service, set up by the government to help people make the most of their money. They offer free and impartial guidance on managing your money and pensions.

Visit https://www.moneyhelper.org.uk or call 0800 011 3797.

Do I have time to change my mind?

Rest easy knowing that we won’t ever rush the equity release process and you’ll have plenty of time to think about your options. Family members are welcome, and in fact encouraged, to come to your meeting(s) with your equity release adviser so they know what’s going on too, and you won’t be pressured into signing anything.

You can pull out during the application process, as long as it’s before you sign the contractual agreement.

Find out more about equity release.