Aviva equity release plan: An overview

Zorica Lončar
31.05.21
4 minute read

If you’re looking into equity release, you’ll have many different providers to choose from. One of the big names you’re likely to come across is Aviva, the multinational insurance company.

In this guide, we’ll take a closer look at the Aviva equity release plan. This includes the main details of Aviva’s lifetime mortgage offer, interest rates, calculator and much more. It’s up to you to decide whether this is the equity release plan for you, but the information below should be a good starting point.

And remember, if you’re accessing equity release in another country, you can use Wise to save. With a Wise multi-currency account, you can receive lump sum and other payments from equity release in the local currency. This avoids bank fees and exchange rate mark-ups, as you can convert currency using Wise’s mid-market exchange rate.

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We’ll look at this in more detail later. But for now, let’s put the Aviva equity release plan under the microscope.

What is the Aviva equity release plan?

Aviva’s equity release plan is a lifetime mortgage. It’s a long-term loan based on the value of your home, which is only paid back when the policyholder passes away.

The Aviva lifetime mortgage is available for people aged 55 and over. It’s designed to help older homeowners to raise cash based on the value of their homes, but without having to sell it or move out.

If you take out this policy, you can choose how you’d like to receive your loan. You can either have one big lump sum, or a one-off lump sum payment and access to a cash reserve - which you can draw from when you need to later on.

Types of Aviva lifetime mortgages

Aviva has a couple of different types of lifetime mortgage available. These are¹:

  1. Lifestyle Lump Sum Max. This equity release plan lets you borrow a one-off sum, starting from £15,000. Most people choose this option if they need the money for a specific purpose, such as helping a child or grandchild put down a deposit on a house, or funding a dream retirement abroad.

  2. Lifestyle Flexible Option. The second Aviva equity release option has two main stages. The first involves you borrowing an initial lump sum (starting from £10,000), while still leaving a reserve of cash you can access later. When you need to in the future, you can borrow money for a second time - drawing from your cash reserve.

Who is eligible for Aviva’s equity release plans?

You must be over the age of 55 to access Aviva’s equity release plans. If you’re applying as a couple, both of you must be 55 or over.

You must also meet the following conditions²:

  • You own a home within the UK with a value of £75,000+
  • You want to borrow at least £15,000
  • You live permanently in your home - or at least for six months of each year
  • You have no mortgage, or only a small mortgage remaining on your home.

Fees and charges

Aviva charges an initial arrangement fee when you sign up for an equity release plan, similar to those charged for standard mortgages.³ There may be other fees or charges to pay at a later date, so it’s important to ask about these before taking out a plan.

There’s no fee for advice received during your initial consultation, but the cost of this may be reflected in the interest rate you’re given.³

Aviva equity release interest rates

It’s crucial to look closely at interest rates before signing up for any equity release plan.

Remember that with some lifetime mortgages - like the two options from Aviva - you don’t make any repayments or pay back any interest on your loan. This means that the interest can rapidly start to stack up, in a process known as compound interest. When you die, the loan and all accumulated interest is paid, usually from the sale of your home. This could leave a big bill for your family members to pay.

As for the specific interest rates available with Aviva’s lifetime mortgage plans, it all depends on your circumstances. Aviva will look at your age and your property’s value to give you a personalised interest rate³.

Interest rates are fixed, but they do tend to be higher than standard mortgages. This is because you don’t have to make any repayments when you take out an Aviva lifetime mortgage.

How does the Aviva equity release calculator work?

If you take a look on the Aviva website, you’ll find something called an equity release calculator. This is a handy tool for anyone interested in equity release, as it can tell you how much money you could potentially release from your home.

You’ll need to enter your age, property type and estimated property value, and the calculator will instantly tell you how much you could release². However, it doesn’t tell you how much an equity release plan will cost in terms of fees and interest rates.

Taking out an overseas equity release plan? Save money with Wise

If you plan to unlock value from an overseas property using equity release, it could be a smart idea to open a Wise multi-currency account first.

With Wise, you’ll get access to local account details for a choice of countries. You can use these details to receive lump sum and regular equity release payments in the local currency. Then, you can convert it using Wise’s mid-market exchange rate, for just a tiny fee.

This could be much cheaper than using your bank, which could charge high fees and expensive mark-ups on the exchange rate.

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After reading this guide, you should have a good idea of what’s on offer at Aviva in terms of equity release plans. We’ve covered the available lifetime mortgage plans, eligibility, interest rate information and more.

But it’s always a good idea to do your own homework - or seek expert advice - before signing on the dotted line. Good luck!


Sources used for this article:

  1. Aviva - what is equity release
  2. Aviva - equity release
  3. Aviva - equity release guide

Sources checked on 17th May-2021.

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