Aviva equity release offers homeowners aged 55 and over the opportunity to unlock the value of their property while continuing to live in it.

As one of the UK’s most prominent providers, Aviva combines flexible plans with competitive rates to meet a variety of financial needs.

Whether you’re looking for a lump sum, a drawdown facility, or tailored features, their options are designed to support your goals in retirement.

Let’s explore what makes Aviva’s equity release plans stand out and how they could work for you.

COMMENT: TimeBank.org.uk is an independent third-party data provider, and the information shared here reflects their views alone, not necessarily those of Aviva. This article is for informational purposes only and should not be considered financial advice or a recommendation to engage with any products offered by Aviva.

Overview of Aviva Equity Release

Aviva Equity Release offers homeowners aged 55 and over the opportunity to access the value tied up in their property without the need to sell or move.

As an established equity release company with over 25 years’ experience, Aviva has helped over 284,000 people release more than £11 billion.¹

As a member of the Equity Release Council, Aviva ensures that its equity release products and services comply with industry standards and welfare benefit regulations.

Aviva’s Equity Release Options

Aviva offers equity release lifetime mortgage options.

Here are the main options available:

• Aviva Lifetime Mortgage Lifestyle Max
• Aviva Lifetime Mortgage Lifestyle Flexible Option

These lifetime mortgages provide two options: a simple, tax-free lump sum of £15,000 or more, or an initial lump sum of at least £10,000 and a minimum cash reserve of £5,000 for future withdrawals.²

Let’s take a closer look.

Aviva’s Lifetime Mortgage Lifestyle Max Option

Aviva’s Lifetime Mortgage Lifestyle Max Option provides borrowers with a lump sum of at least £15,000.

Here are some more facts about this plan:

• Higher Loan-to-Value (LTV): Designed for those with immediate financial needs, Lifestyle Max typically offers a higher LTV. Enhanced rates are not available for this plan.
• Interest Accumulation: Interest is charged on the borrowed amount and any accrued interest during the mortgage term, which can significantly increase the total owed over time.

Aviva’s Lifetime Mortgage Lifestyle Flexible Option

Aviva’s Lifetime Mortgage Lifestyle Flexible Option provides two routes: a one-off tax-free lump sum of £15,000 or more, or a lump sum of £10,000 or more with an additional £5,000 or more set aside in a cash reserve for future withdrawals.

Here are some more basic facts about this plan:

• Cost-Effective Flexibility: You can benefit from reduced interest costs by drawing funds only when necessary.
• Interest and Debt Growth: Interest is charged on the borrowed amount and compounded over time, which can significantly increase the total amount owed.

Who Qualifies For Aviva’s Lifetime Mortgages?

To qualify for Aviva’s lifetime mortgages, you need to meet certain criteria.³

These include:

• Age: You must be at least 55 years old. If you are applying as a couple, both applicants must be 55 or older.
• Property Ownership: The property must be your main home, and it should not be unoccupied for more than six months at a time.
• Property Value: Your property must be worth at least £75,000.
• Residency: You must be a UK resident, excluding the Isle of Man and the Channel Islands.

These criteria ensure that the lifetime mortgage is suitable for your circumstances and that the property meets the necessary requirements for the loan.

What Are the Pros and Cons of Aviva’s Equity Release Plans?

The pros and cons of Aviva’s equity release plans differ slightly depending on which plan you’re considering, but are broadly the same across the two options.

Benefits of Aviva’s Lifetime Mortgages

The benefits of Aviva’s lifetime mortgages include their customisable repayment options.

A quick look at the pros:

• Tax-Free Lump Sum: Access a tax-free lump sum to spend however you choose.
• Flexible Repayment Options: Make voluntary partial repayments of up to 10% of the initial loan amount (plus any additional borrowing) each year without incurring early repayment charges. There’s no limit to the number of repayments, as long as each is at least £50.
• No Upper Age Limit: Available to anyone aged 55 or over, with no maximum age restriction.
• Online Access: Easily view your policy details 24/7 for added convenience.
• Downsizing Protection: Repay your lifetime mortgage in full without early repayment charges if you move to a property that doesn’t meet Aviva’s lending criteria, provided the mortgage has been held for at least three years (terms and conditions apply).
• No-Negative-Equity Guarantee: You or your estate will never owe more than the property’s sale value, as long as it’s sold for the best price reasonably obtainable.
• Optional Inheritance Guarantee: Safeguard a percentage of your home’s value for your estate, ensuring your loved ones receive an inheritance. Note that this feature will reduce the amount you can borrow.
• Moving-Home Option: Transfer your lifetime mortgage to a new property, provided it meets Aviva’s lending criteria at the time.
• Future Borrowing Potential: You may be able to borrow more in the future, though this depends on Aviva’s lending criteria at the time.

Benefits Specific to the Lifestyle Flexible Option

The Lifestyle Flexible plan includes all the benefits listed above and a number of extras.

Specific benefits of the Lifestyle Flexible Option:

• Flexible Cash Reserve Access: You can make withdrawals of as little as £500 from your cash reserve, giving you flexibility to access funds when needed.
• Reserve Up to 50% of Borrowed Funds: Leave up to 50% of the total amount you borrow in your cash reserve for future use.
• Minimum Loan Requirement: Borrow a total minimum of £15,000, with an initial loan of £10,000 and a reserve of £5,000.
• Interest Payable Only on Released Funds: You won’t pay any interest until you withdraw the money from your cash reserve.
• Individually Tailored Interest Rates: Each release is subject to the interest rate current at the time, tailored specifically to your circumstances.
• Health and Lifestyle Benefits: If you have certain health or lifestyle conditions, you may qualify for lower interest rates or a higher loan-to-value (LTV) ratio.

Drawbacks of Aviva’s Lifetime Mortgages

As with any provider, considering an Aviva lifetime mortgage involves understanding the potential drawbacks and risks of lifetime mortgages.

These include:

• Accumulating Interest: Interest is charged on the total amount borrowed and any interest already added, leading to a compounding effect that can significantly increase the debt over time.
• Reduced Inheritance: The increasing loan balance will reduce the value of your estate, thereby decreasing the inheritance available for your beneficiaries.
• Impact on Benefits: Releasing equity may affect your entitlement to means-tested benefits, as the additional funds could alter your financial position.
• Early Repayment Charges: If you choose to repay the loan early, you may incur substantial early repayment charges, which can be a significant financial consideration.
• Property Criteria for Moving: Transferring your lifetime mortgage to a new property is subject to Aviva’s lending criteria at the time. If the new property doesn’t meet these criteria, you may need to repay the loan in full, potentially incurring early repayment charges.
• Tax Implications: While the funds released are tax-free, how you use them could have tax consequences. For instance, investing the money may generate taxable income, and receiving a lump sum could affect your tax position.
• Complexity: The terms and conditions of lifetime mortgages can be complex, requiring careful consideration and professional advice to fully understand the implications
• Long-Term Financial Commitment: A lifetime mortgage is a long-term commitment that can limit your financial flexibility. Changes in personal circumstances, such as needing to move for health reasons, could present challenges if the new property doesn’t meet Aviva’s lending criteria, potentially requiring full repayment of the loan.
• Cost: Because of their higher interest rates and interest roll-up feature, lifetime mortgages can be a more expensive way to borrow than other later-life options.

Aviva’s Lifetime Mortgage Interest Rates

Aviva’s lifetime mortgage interest rates typically range from 5.51% to 7%.*

These rates can vary based on factors such as the specific product chosen, the amount of equity being released, and individual circumstances.

It’s always a good idea to check the latest rates directly with Aviva or consult with a financial advisor to get the most accurate and up-to-date information.

*These rates were accurate on 27/11/2024 but may have changed since our last update.

Is Aviva a Safe Option for Equity Release?

Aviva is considered a safe option for equity release.

Here are a few reasons why:

• Regulation and Oversight: Aviva Equity Release is regulated by the Financial Conduct Authority (FCA), which ensures that they adhere to strict standards and practices designed to protect consumers.⁴ This regulation provides an additional layer of security and trust for customers.
• Equity Release Council Membership: Aviva is a member of the Equity Release Council (ERC), an industry body that sets high standards for equity release providers.⁵ Membership in the ERC means that Aviva follows a code of conduct that includes guarantees such as the No Negative Equity guarantee, ensuring that you will never owe more than the value of your home.

Aviva is a reputable and safe choice for those considering equity release. Speak to your equity release advisor to discuss whether this provider would best suit your needs and to explain the alternatives.

Alternatives to Aviva’s Equity Release Plans

There are several alternatives to Aviva’s equity release products that you might consider.

These include:

• Downsizing: Selling your current home and buying a smaller, less expensive property can free up cash without the need for a loan. This option allows you to retain full ownership of your new home and avoid the interest and fees associated with equity release.
• Remortgaging: If you have a significant amount of equity in your home, you might be able to remortgage to release some of that equity. This can be a more cost-effective way to access funds, especially if you can secure a lower interest rate.
• Personal Loans: Depending on your financial situation, taking out a personal loan might be a viable option. This can provide the funds you need without affecting your home ownership, though it will require regular repayments.
• Savings and Investments: Using your savings or liquidating investments can be a straightforward way to access funds. This option avoids the costs and complexities of borrowing but may impact your long-term financial security.
• Family Assistance: Some people turn to family members for financial support. This can be a flexible and interest-free way to access funds, though it requires open and honest communication about repayment terms and expectations.
• Government Grants and Benefits: Check if you are eligible for any government grants or benefits that could provide financial assistance. This can be a valuable source of support, especially for those on a low income.

These alternatives can provide different ways to access funds without the need for equity release, each with its own advantages and considerations.

It’s important to evaluate your options carefully and seek professional advice to determine the best solution for your circumstances.

Aviva’s Contact Details

You can get in touch with Aviva in a few different ways.

These include:

• The Aviva chatbot, accessible via the company’s website.⁶
• The MyAviva app.⁷
• Telephone (0800 141 3493 for prospective clients and 0800 158 4177 for existing clients).
• Aviva’s general online enquiry form.⁸

Common Questions on Aviva Equity Release

Final Thoughts on Aviva’s Equity Release Plans

Aviva’s equity release plans offer a comprehensive and flexible solution for homeowners looking to unlock the value of their property in retirement.

With features like a No Negative Equity guarantee, downsizing protection, and tailored interest rates, these plans provide practical solutions for those seeking financial flexibility in later life.

However, it’s essential to consider the long-term implications, such as accumulating interest, potential impacts on inheritance, and changes to eligibility for means-tested benefits.

If you are considering Aviva equity release plans, speak to a qualified financial adviser to ensure that equity release aligns with your personal goals and financial circumstances.