The Lifestyle Flexible Option offered by Aviva offers a great deal of flexibility in borrowing. It allows for an initial lump sum withdrawal as well as the potential for further cash releases in the future, if necessary. The minimum loan allowed is a total of £15,000, with £10,000 of that being the initial loan and an additional £5,000 set up as a cash reserve for future withdrawals.
There are a number of features of this product that are unique:
1. Voluntary partial repayment. There are now options on the Aviva Flexi Plan to make partial repayments without incurring any early repayment fees or charges. In fact, up to 10% of the original loan amount can be repaid each year without incurring any early repayment charges and up to four payments can be made in any given year subject to a minimum amount of £500.
2. Cash reserve. Money can be drawn out of this reserve in very small increments. In fact, as little as £2,000 at a time can be withdrawn from the cash reserve. Interest only needs to be paid on the money that is withdrawn, not on the money held within the reserve. No further charges exist on withdrawals from the cash reserve facility.
3. No negative equity. With this feature, the estate will never be left in the negative. So, if the home eventually sells for less than what is owed on the loan, Aviva will not expect the difference in payment.
4. Low Interest Rates. Aviva will guarantee an interest rate for 14 weeks following the submission of an application. Additionally, interest rates are fixed for the lifetime of the equity release loan.
5. No repayments. There are no repayments required during the term of the loan except in very specific situations. Repayment typically takes place upon the sale of the home which usually occurs when the homeowner passes away or moves into permanent long term care.
Not only does the Aviva Lifestyle Flexible Option allow for all of the above features, but it also allows for several enhancements as well. The most popular of these options is the inheritance guarantee, which allows the homeowner to safeguard a partial inheritance for their beneficiaries. This inheritance guarantee cannot be added a later date, but can be removed at any later date. It can only be added as an enhancement at the outset of this drawdown plan.
The second enhancement with the Aviva Lifestyle Flexible Option is to benefit from the enhanced lifetime mortgage facility that Aviva could offer should ill health been experienced. By answering a series of questions via the health and lifestyle questionnaire, Aviva underwriters will assess whether enhanced terms could be offered. If they do then on the Aviva Flexi Plan the interest rate will be reduced below that of the standard plans accordingly. This is ideal for those looking for the lowest equity release interest rates.
The ability to make future withdrawals against the cash reserve. These future withdrawals are subject to the lending criteria at the time but can be used as a safeguard for those consumers who need additional funding after their initial loan.