Aviva brings over 15 years’ experience to the table as they continue to provide innovative retirement solutions to UK homeowners. The company was originally founded as Norwich Union before the name change to Aviva. No matter the name, the company still brings beneficial equity release products and experience to the table. Aviva Lump Sum Max and other lifetime mortgage products have helped more than 100,000 people.
Summary of the Aviva Lifestyle Lump Sum Max Plan
The Aviva Lump Sum Max plan is a one-time lump sum payment for homeowners. Repayment is not due until death or a move into long-term care. Like other Aviva plans this does come with some flexible features and options like the new voluntary repayment choices.
Homeowners receive a tax-free lump sum of cash to spend as needed based on the age of the youngest homeowner and the property value. The older the youngest applicant, the higher the maximum equity release amount becomes. No repayments are required during the loan term, unless the homeowner decides to take one of the repayment option balances. Interest is added to the previous year’s balance on a yearly basis & compounds thereafter on a roll-up lifetime mortgage basis.
An annual statement each year will confirm the current balance and this will continue until the last person privy to the title dies or moves into long term care. Aviva then provide a window of 12 months by which time the house needs to be sold, or the equity release repaid.
This loan comes with a no negative equity guarantee as required by the Equity Release Council and Aviva are regulated by the Financial Conduct Authority.
Product Criteria of the Lump Sum Max Scheme
Homeowners must be at least 55, based on the age of the youngest homeowner. There is no maximum age with Aviva. The minimum loan amount is £15,000 with a maximum lend of £600,000.
The property must be located in England, Northern Ireland, Scotland, or Wales and the property value must be at least £75,000. It cannot be in the Isle of Man or Channel Islands. The property must be the main residence, as well as meeting the lending criteria. There are restrictions on leasehold property titles in that there must be 160 years remaining, less the age of the youngest homeowner.
Homeowners have a guarantee of 14 weeks at the rate fixed at quote stage. If the completion date is beyond this period then a new rate may apply.
Aviva Maximum Cash Release Calculation
The Aviva Lump Sum Max product is designed to provide homeowners with the highest possible single lump sum based on house value and Aviva’s loan-to-value ratios. The calculations will only be based on 85% of the property value for flats and maisonettes.
Therefore, an applicant with a minimum age of 55 is able to take 20.5% of the home value or joint applicants can receive 19.5%. A single applicant at the maximum age can receive up to 52% of the property, whereas joint applicants aged 90 or over receive up to 51%.
Unique Features of the Aviva Lump Sum Lifetime Mortgage
The Lump Sum Max plan from Aviva can benefit from lower interest rates based on the health and lifestyle of the applicant(s). This is determined on a case by case basis & subject to completion of a health & lifestyle questionnaire. Should qualification for enhanced rates apply then it can increase the amount Aviva would normally lend, or the option to take a reduction in the standard interest rate.
New Voluntary Repayment Options
Aviva is now offering new features with new voluntary repayment options as a way to meet demand, flexibility and keep up with current market changes. This voluntary option works with many of Aviva’s products like the enhanced lifetime mortgage, lump sum max, and flexible options. It gives the homeowner a chance to repay up to 10% of the original borrowed amount without penalty, every year.
Using this 10% rule to suit, planholders can choose various ways to repay. There could be the option to pay only interest on this plan which would render the balance level throughout. Alternatively, if the full 10% was repaid then you may see an erosion of the capital balance & if maintain could eventually repay the whole equity release scheme off over a period of 16-17 years.
In both situations the homeowner has control over the amount repaid and the type of repayment option they take. It ensures the homeowner can keep a check on whatever they wish the future balance to be & remain in control. Something the equity release marketplace has been demanding for many years.
With joint applications, if a partner dies the survivor is able to downsize and redeem the impaired equity release plan without any penalty attached. The loan terms require repayment within three years of either event.
Aviva Equity Release Incentives
A free valuation is available, as well as cashback options of upto £1,000. There are exclusively reduced interest rates available on the Aviva Lump Sum Max which only certain equity release brokers can provide to their customers. Each additional incentive added by the applicant will have a bearing on the interest rate & APR applicable.