Your path from first call to cash in the bank – and how it’s paid back
Here are the 10 strides that can take you to releasing a cash lump sum, and what will happen when the lifetime mortgage ends.
Our lifetime mortgage, the type of equity release we offer, is a long term-loan secured against the value of your home. Choosing to release money from your home this way will reduce the amount of inheritance you can leave behind, and possibly affect your tax position and whether you can still get certain means-tested benefits.
It’s one of the bigger financial decisions you’ll make, and it’s key to be sure it’s right for you. Here are the stepping stones that lead you from considering a lifetime mortgage to the cash landing in your account – and an outline of what happens once it’s time to repay the money.
How long does equity release take?
It usually takes around 8 to 10 weeks from when we get your lifetime mortgage application (step 6 below) to you having the money.
How to apply for a lifetime mortgage with us
Make sure you’re eligible When you first speak to our team, they’ll chat through a few key details about you and your property to check whether you can take out a lifetime mortgage.
Anyone applying has to be 55 or over, whether that’s just you or both of you for a joint application. You also need to own a property in the UK, which doesn’t include the Channel Islands or Isle of Man, worth at least £75,000.
Finally you must have cleared any existing mortgage on your home, or only have a small amount remaining. You’d have to clear this before you apply for a lifetime mortgage, or pay off the outstanding balance using the money you release.
Once you’ve ticked off these basics, we can set up a meeting for you with an FCA-regulated equity release adviser.
Be on top of your prep Ahead of your meeting, think carefully about how much you need to borrow and what you need the money for.
Gather up bank statements, details of your income, what your outgoings are and any state benefits you’re being paid – along with a reasonable idea of what your home’s worth today.
Also, jot down any the questions or worries you want to run past your adviser.
Meet with your equity release adviser They’ll explain how it all works and make a recommendation based on your wants, needs and future plans. They can only give advice about our lifetime mortgage, and they’ll tell you at this point if they think it’s right for you.
If so, they’ll give you a personal illustration and go through the all-important details with you – we’re talking benefits, costs and risks. If any details feel fuzzy, go over them again until everything’s clear in your mind.
Remember, when you come to us directly, you won’t pay a separate advice fee. Instead we’ll pay the adviser commission once you complete on your lifetime mortgage.
Find out your family’s thoughts You might want to walk through your plans with your close family, especially if taking out a lifetime mortgage could affect them, and hear their point of view. People sometimes find it helpful to bring family members along to the meeting with their equity release adviser.
It’s make-your-mind-up time Now’s when you’ll put in a second meeting with your adviser.
This is to confirm you want to go ahead with the application. It’s a chance to clear up any questions you have, to go through any outstanding paperwork with your adviser, and to chat through the next steps.
Send your application our way Your adviser will submit your application, and sort out an independent valuation of your home. You may have to pay for this up front.
Putting the spotlight on your property As well as the independent valuation arranged by your adviser, we'll require a survey of your property. If the survey shows that your home needs any urgent repairs, you may need to sort them out before we can make you an offer, or as a condition of your lifetime mortgage.
The results of the valuation and survey will help us decide whether we can make you an offer, how much we are able to lend you and whether this depends on any conditions (such as paying off a mortgage or making repairs).
Talk to a solicitor Accepting an equity release offer means signing a contract, and you’ll need to go through this with a solicitor. Your adviser can help arrange this.
How long this takes can vary, and may depend on whether any legal issues or question marks pop up around your property. You'll be responsible for paying your own legal fees.
Your money’s in your bank We’ll pay the money to your solicitor when everything’s complete. Any charges to be paid, including fees or debts secured against the property, will be settled first. Your solicitor will then transfer the rest of money into your bank account.
A follow-up meeting about your finances Fast forward a few weeks, months or years, and you may have another sit-down with your adviser to check your finances are still in shape, or to arrange wills and powers of attorney.
How your lifetime mortgage is repaid
You won’t need to pay a penny back to us along the way, although you can choose to make partial repayments (more on that in a moment). The loan is usually repaid using money from the sale of your home, once you (and your partner, for a joint lifetime mortgage) die or go into long-term care, subject to our terms and conditions.
Interest over the term of your loan
Each year interest is added to both the loan and any previous interest that has already built up, which will quickly increase the amount owed. You’ll get an interest rate when you get your offer, which will be fixed until the lifetime mortgage ends.
Voluntary partial repayments
Each year, subject to our terms and conditions, you can choose to repay up to 10% of the total amount you’ve borrowed, free from any early repayment charge. This is known as a Voluntary Partial Repayment. You can make these across several smaller payments, but the minimum you can pay each time is £50.
You can't set up regular repayments (like a direct debit), so you’ll need to get in touch with us each time to pay by BACS, CHAPS, Faster Payments, or debit card.
You can only make partial repayments like this if you applied for a lifetime mortgage after 28 April 2014.
How the final repayment works
This is due when the last or only borrower dies or goes into long-term care, and the lifetime mortgage is usually paid back from the sale of the property. Any money that’s left after the payment is made will go to the beneficiaries of your estate – and your ‘estate’ simply means everything you owned. The people managing your estate have up to 12 months to repay the lifetime mortgage.
Interest is calculated daily and added to the lifetime mortgage once a year until the money has been paid back in full. The property’s home and buildings insurance must stay up to date until that happens.
How much money could you release from your home?
Get crunching the numbers for an idea of how much tax-free cash you could be able to release from your home using our calculator.
Take your first step by arranging a call with a UK-based equity release adviser. You don’t have to commit to anything, it’s just to see if it’s an option for you. And you won’t pay a separate advice fee. Instead, we'll make a commission payment to the adviser on completion of your loan. Here are two ways to get in touch.
Call us free
Ring now and make an appointment with an equity release adviser.
0800 141 3493
Monday to Friday: 9:00am - 5:00pm
Weekends and Bank Holidays: Closed
Ask us to call you
Give us your name and number, and an adviser will call you. You can pick a chosen day and whether morning or afternoon is best.
Your call will be answered by the Aviva Equity Release Advice team, who can provide information and advice on Aviva's lifetime mortgages only. They're authorised and regulated by the Financial Conduct Authority.
Calls to 0800 or 0808 numbers from UK landlines and mobiles are free. For our joint protection, calls may be recorded or monitored, and saved for a minimum of 5 years. Our opening hours may be different depending on which team you need to speak to.
Equity release FAQs
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.
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.
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.
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.
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 pretty big 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:
