Posts Tagged ‘Aviva’
Monday, January 30th, 2012
Following on from the post on Friday regarding Aviva reducing its equity release interest rate on their Lifestyle Flexi plan (drawdown scheme), another lender has now followed suit.
LV= (Liverpool Victoria) today advised that it is also to drop its rates with effect from 1st February 2012 on both its Lifetime Mortgage – lump sum plan & the Flexible Lifetime Mortgage – drawdown scheme.
The corresponding rates are as follows: -
- Lifetime Mortgage – lump sum – 6.39% (6.60% APR)
- Flexible Lifetime Mortgage – 6.49% (6.8% APR)
Although interest rates are higher than the two largest providers – Aviva & Just Retirement, LV= do have some quality features that make it stand out from the crowd.
Firstly, their early repayment charges are fixed. This means that there is no link to gilt rates as the basis for the early repayment charge calculation, like Aviva & Just Retirement do.
LV=’s early repayment charges are known from the outset & are 5% in the first 5 years & 3% in the next 5 years. For some this can be reassuring news should their circumstances change in the future & early repayment is necessary.
LV= also allow partial repayments, subject to a minimum of £5,000 so if you are looking to work around potential early repayment this can be planned accordingly.
Equity Release Supermarket currently receive a free valuation with LV= with no current deadline. So now is as good a time as any to be considering an equity release application with the recent interest rate reductions across the board.
If you wish to obtain a quotation or advice on any of the LV= equity release schemes, please call our freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
Tags: Aviva, drawdown equity release, early repayment charges, equity release, Equity Release Adviser, Equity release interest rates, equity release schemes, Equity Release Supermarket, free valuation, lifetime mortgages, LV=
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Monday, January 30th, 2012
If you have been seriously considering taking out an equity release plan, the most important question to come to mind will be ‘what is the maximum equity release available?’
Obviously, you may not want to secure the everything you can get, however, a useful equity release calculator can advise upto the maximum available. For instance with a drawdown equity release plan, it would be helpful if you knew the maximum, as any funds not taken in such a scheme would then be held in a reserve facility for future use.
You will also need to bear in mind that there are certain factors that will be taken into account in order to arrive at the figure that would be released to you in such a plan.
First and foremost, your age will be a very important factor. The younger you are, the less you can expect to have released in an equity release scheme. You would tend to find that the companies that deal in equity release plans add an extra percentage point of LTV (loan-to-value) for each year the applicant gets older.
This is because the relevant company has to estimate how long it is likely to be until they will be able to secure the final equity – i.e. your property. If you take out an equity release mortgage when you are in your late-fifties or early-sixties, you can expect to receive a far lower payout than if you were to have taken out the plan in your eighties, for example. This is purely down to life expectancies which are increasing all the time as people are healthier & more active in their retirement years.
You should also bear in mind, at this stage that the companies dealing in equity release schemes have a minimum age threshold in place and this is generally set at 55 years of age. These would be companies such as Aviva, New Life Mortgages, and Stonehaven. However, some equity release companies such as Just Retirement & LV= impose a higher minimum age of 60 before you can apply.
The next factor that will be taken into account is the actual market value of your property. Again, the higher this is, the more you can expect to receive in your payout. There are minimum value thresholds in place here as well which is £60,000. However, most companies impose higher minimum values & £75,000 or £100,000 isn’t uncommon.
If you are looking to take out an equity release plan in a joint application, the youngest applicant’s age will be the deciding factor as to the amount of money that will be released in the payout. This is because the company must wait for both applicants to either pass away or move into permanent residential care and the youngest applicant will be the most likely to vacate the property last in either capacity. Also, as stated earlier, the youngest person in the couple must also be over the age of 55.
There are convenient equity release calculators on many websites that will give you a very good idea of the amount of money to be expected as a payout when you take out such a plan. All you need do is simply complete an online enquiry form and these will return the maximum value that may be available to you in an equity release scheme. If you are happy with this figure, you may then go ahead and start the ball rolling with the relevant company; there is also a facility to discuss equity release mortgages in more detail with a qualified equity release adviser, if you have further questions that require attention.
Tags: Aviva, drawdown equity release, equity release, Equity release calculator, equity release schemes, lifetime mortgages, maximum equity release, minimum age
Posted in Calculator, Equity Release | No Comments »
Friday, January 27th, 2012
With the latest round of equity release rate reductions, it seems both Aviva & Just Retirement are vying for top spot.
Currently, Just Retirement lead the way with their round of reductions a few weeks ago at a market leading 6.2% annual rate.
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However, Equity Release Supermarket have been notified that with effect from next week the Aviva flexi drawdown plan is set to become the market leader again by usurping Just Retirement with a reduction of 0.12% to a new market leading rate of just 6.1% annual rate.
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Mark Gregory – Director & founder of Equity Release Supermarket comments – “This is excellent news & the price war has been long awaited. Equity release interest rates have been in the doldrums recently compared to mainstream interest rates. We are getting back to rates from a few years ago & that sub 6% barrier is now not too far away. This new Aviva rate is exclusive with further benefits of a free valuation & an excellent £500 cashback on completion for the client. With gilts rates so low at present, now is as good time as any to be considering taking out an Aviva Equity Release plan.”
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Equity Release Supermarket are one of the leading independent equity release advisory firms in the UK currently & can be found on their informative website http://www.equityreleasesupermarket.co.uk.
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If you require information on the new Aviva Flexi deal please call 0800 678 5159 where one of the equity release team would be willing to assist & provide further details.
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Tags: Aviva, drawdown equity release, equity release, Equity Release Adviser, Equity release interest rates, equity release schemes, Equity Release Supermarket, Just Retirement, Roll up lifetime mortgage
Posted in Equity Release, News | No Comments »
Friday, November 11th, 2011
Equity Release Supermarket is pleased to announce its new equity release deal from Aviva.
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Commenting on the exciting new deal from Aviva equity release which offers clients a FREE valuation* plus a £500 cashback & specially reduced interest rate of 6.32%, director Mark Gregory states…
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‘the offer from Aviva is testament to the work & progress Equity Release Supermarket is making in the equity release market. Buoyed by the growing consumer confidence in equity release schemes, I feel that we are now positioned to increase our market share. Excellent deals from the likes of major equity release companies such as Aviva will help my team of advisers promote such competitive equity release plans.
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Equity Release Supermarket are now recognised as one of the major independent equity release brokers in the UK. Their market leading website offers all the current equity release interest rates & exclusive offers currently available.
Experience the Equity Release Supermarket website or to speak to one of their experienced equity release advisers call freephone 0800 678 5159.
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*Free valuation applies to property valuations upto £250,000
Tags: Aviva, Aviva cashback deal, Aviva equity release, Aviva free valuation, equity release, Equity release interest rates, equity release schemes, Equity Release Supermarket
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Monday, October 10th, 2011
People think that going directly to equity release companies rather than going through an independent equity release adviser will save time and money. This is not really true.
There are intermediaries such as Equity Release Supermarket who can research the whole of the equity release market which in itself includes over ten equity release providers. Each company themselves may then have several different equity release products which opens a plethora of options for the proposed buyer.
So how can approaching one individual company therefore provide the customer with the best advice? Obviously not.
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So should equity release intermediaries be your only option?
Direct companies offering equity release schemes are now few & far between. Most equity release lenders realise the importance of providing quality advice & ensuring the consumer receives best advice. Again companies like Equity Release Supermarket will receive more favourable equity release deals than if the customer went directly to any lender.
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If we take Aviva for example.
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Their direct sales force has been drastically cut for its halcyon days from over 10 years ago when competition was not so fierce as only a few lenders offered equity release plans. Marketing costs & the funding of a direct sales force comes with a huge financial burden. Company cars, pension schemes & basic salaries plus bonuses all need to be paid for & by whom…the customer.
Compare this to a company such as Equity Release Supermarket. Aviva do not incur any marketing costs for them, no salaried sales force with company cars, so the savings can be allocated elsewhere for such intermediaries.
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This is shown in the product offering & the competitiveness of the interest rate & deals Equity Release Supermarket receive from Aviva, which can then be passed onto the consumer. Currently there is over 0.5% disparity between the Aviva drawdown scheme sold via Equity Release Supermarket & that sold by Aviva direct. Equity Release Supermarket can offer a special interest rate of just 6.32% & they can also currently offer a free valuation on properties upto £250,000.
The only extra fee involved with an equity release intermediary firm will be the advice fee they charge. However, this would seem a fair price to pay for knowing you have the best Aviva equity release deal in the market. This could be possibly saving £270 on the valuation fee & depending on the size of the release applied for could amount to many £1000′s in interest by having a much lower interest rate!
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Criteria to be an equity release advisor
A lot of equity release scheme providers get their message through to the public via the media; however this alone does not explain all the terms and the details in depth. To understand each and every aspect of a certain scheme one has to have a good knowledge and an in-depth expertise of the terms used in the market as a whole. If equity release is not for you, your independent advisor will should tell you so. They will also consider any financial alternatives such as downsizing, using savings etc before arriving at an equity release recommendation.
Professional independent equity release advisors must have the appropriate licences in order to carry out any business. They must comply with all the rules and regulations of the Financial Services Act & deal with equity release schemes that are members of SHIP.
Therefore, always do your research & find an independent financial adviser who is local to you & who will take the time to understand your requirements & find the best equity release UK scheme for you.
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If you require independent equity release advice with a no obligation appointment, please call the Equity Release Supermarket team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk.
Tags: Aviva, Aviva drawdown equity release, equity release, Equity Release Adviser, equity release schemes, equity release UK, independent financial adviser
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Sunday, June 6th, 2010
This article provides information on the latest interest rates & changes that Aviva are making to their product range.
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With the current shortage of equity release lenders, additional pressures are mounting on the remaining companies providing equity release schemes.
These lenders are now experiencing larger than normal business volumes as the number of providers has dwindled over the past 12 months. As a consequence some servicing issues are of concern, of which the biggest provider is now addressing.
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Of these equity release companies; Aviva are the first to change their lending criteria & this post provides details of this in advance.
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Come the 14th June, Aviva will be increasing their interest rates & lowering their loan-to-values (LTV) & details of these changes are detailed later in this article.
This is a negative step for the market given that Aviva’s Maximum Cash Release plan offers the highest cash release in the lifetime mortgage market at present.
Therefore, clients looking for financial relief by releasing the maximum possible after this date now have a reduced cash sum available. Couple this with Aviva’s recent reduction in loan-to-values on flats & maisonette’s & there is a definite swing away from higher loan values.
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Aviva will now only lend on 75% of property values on flats & maisonette’s, which is a dramatic move away from lending on these abodes. Couple this with the reductions in loan-to-values which are being announced on the 14th June, means a significant shift in their lending criteria.
This will affect in particular clients looking at debt consolidation or potential other requirements that demand the maximum possible.
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Equity Release Supermarket as independent financial advisers have witnessed firsthand the demand for larger advances this year alone. Predominantly, this has been for debt consolidation purposes whereby clients in retirement are now experiencing income shortfall issues as their investment returns have fallen significantly.
This has resulted in financial pressures meeting these monthly liabilities including mortgage payments, personal loans or more commonly, credit card debts.
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Nevertheless, there are fresh signs within the market indicating that external forces are construing to develop new plans & ideas to drive this stagnant market forward.
We heard last week that More2 Life is introducing an impaired life roll-up equity release scheme. This is welcoming news for the market & hopefully the sign of things to come.
In the meantime the current crop of lenders can dictate in a market having little competition from other providers.
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Part of the result of this is Aviva’s impending equity release scheme changes.
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Aviva have announced an increase of 0.1% to the interest rates for new business on the Lifestyle Flexible Option, Lifestyle Lump Sum and Lifestyle Lump Sum Max.
Equity Release Supermarket receive an exclusive interest rate lower than that offered directly by Aviva themselves.
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The new Aviva interest rates wef 14th June are therefore 6.70%, 6.55% & 7.40% respectively. On paper this doesn’t represent a large percentage increase; however given the roll-up nature of these products, this will result in £1000′s difference in the future balance.
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Additionally, Aviva equity release are reducing the loan-to-values on the Lifestyle Lump Sum Max by 2% for customers aged 60 or below, and by 1% for those over 60.
Even with this decrease, they currently still offer the best LTV scale in the market on all properties (apart from flats & maisonettes).
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The LTV rates for the Lifestyle Flexible Option and Lifestyle Lump Sum will stay the same.
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Example LTV’s on the Lifestyle Lump Sum Max are now: -
Age 55 - 19%
Age 60 - 23%
Age 65 - 29%
Age 70 - 35%
Age 75 - 40%
Finally, there are transitional arrangements in place which anyone considering the Aviva equity release schemes should be aware of;
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Applications on the Lifestyle Flexible Option, Lifestyle Lump Sum and Lifestyle Lump Sum Max dated prior to 14th June and received by the 18th June will receive the old interest rates. Also, any Lifestyle Lump Sum Max applications will be on the old LTV scale.
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Applications on the Lifestyle Flexible Option, Lifestyle Lump Sum and Lifestyle Lump Sum Max dated before 14th June and received after 18th June will receive the new interest rate. Lifestyle Lump Sum Max applications will be on the new LTV scale.
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Applications dated after 14th June will receive the new interest rates. Lifestyle Lump Sum Max applications will be based on the new LTV scale.
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To request an Aviva illustration or further advice on any of the issues discussed above, please contact Mark Gregory on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
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Tags: Aviva, Aviva Lifestlye Lump Sum Max, Aviva Lifestyle Flexible option, Aviva Lifestyle Lump Sum, equity release, Equity release interest rates, equity release schemes, lifetime mortgages, loan to value, Roll up lifetime mortgage
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Tuesday, May 4th, 2010
Anyone considering taking out equity release has many choices to make.
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One of the biggest & most expensive if not advised correctly could be on early repayment of an equity release scheme.
However, before we delve into the main differences between current equity release schemes we briefly look at why early repayment charges exist & how they can arise.
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Primarily, equity release is designed to run for the rest of your life.
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There is no fixed term & the scheme will continue to run until the second person has died or moved into care.
At that point the property is usually sold, with the equity release provider being repaid first from the proceeds & any remaining balance is passed into their estate.
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With the earliest age of starting one of these schemes being 55, the total term could well be in excess of 30 years. For this reason lenders hedge their bets in order to recover any potential early repayment which may cost them significantly.
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Obviously life expectancy for everyone differs.
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The Financial Services Authority (FSA) use average life expectancy data in order to provide the basis of a lenders key facts illustration (quote).
It is with this same information that lenders will also formulate their early repayment charge structure.
We can relate such charges with a conventional mortgage, whereby upon early repayment within a specified term the borrower will incur an early repayment charge.
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So, upon what circumstances would an early repayment charge exist?
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This could be for a number of reasons: -
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1. Sale of property
2. Inheritance
3. Death
4. Moving into long term care
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However, not all the aforementioned would incur a penalty upon early repayment.
Equity release providers would not invoke a penalty on death or moving into long term care. Additionally, where some lenders invoke a charge for a set period of time, once this term has expired there would be no penalty thereafter.
However, there would potentially be a penalty if the property was sold during the lifetime of the owner for example if an inheritance was received or downsizing occurred & the scheme was repaid as a consequence.
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In addition to the early repayment charge the lender could also levy an administration fee which can vary from zero to £300.
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How do lenders calculate the early repayment charge & how much can it be?
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The answer to this varies significantly & this can be evidence with the following simplified table: -
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| LENDER |
TERM |
BASIS |
MAXIMUM CHARGE |
| Aviva |
Remainder of the plan term |
Charge linked to performance of gilts. |
Maximum 25% initial advance |
| Hodge Lifetime |
10 years |
Percentage penalty based number of years |
5% |
| Just Retirement |
Remainder of the plan term |
Depends on FTSE UK 15 year gilt yield |
Maximum 20% of total advances |
| LV= |
10 years |
Percentage penalty based number of years |
5% yrs 1 to 5, 3% yrs 6 to 10 |
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As you can see, all equity release schemes have the inclusion early repayment charges & if you are considering early repayment it maybe a case of damage limitation or manipulation of repayment date that could avoid potential penalties.
From experience, this aspect of equity release penalties I will cover in a separate article to follow & can provide advice on methods of alleviating these penalties from lender to lender.
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This will also include topics such as: -
- Options on downsizing
- Gilt rates & where to find current gilt yields
- Information on repayment to existing equity release borrowers who are looking for additional funds or achieve a lower interest rate
- Possible avoidance of early repayment charges – lender by lender
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If you have any questions or require further information on the subject of equity release early repayment charges, please email mark@equityreleasesupermarket.co.uk or contact mark on freephone 0800 678 5159.
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Tags: Aviva, early repayment charges, equity release, equity release early repayment, equity release penalties, equity release schemes, Just Retirement, lifetime mortgages, LV=, mortgage redemption, redeem mortgage
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Thursday, March 11th, 2010
Stonehaven, the innovative equity release lender that originally sourced its funding from Santander, should now benefit from the withdrawal from the market of the Halifax Retirement Home Plan.
Stonehaven now use various finance houses in order to release equity in this sector. Their Interest Select plan can provide an interest only mortgage that will run for the rest of your life.
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To provide peace of mind to their customers, the interest rates are fixed for life. Therefore you can be safe in the knowledge that your monthly interest only mortgage payment will never change, regardless of external interest rates.
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The Stonehaven Interest Select plan has been given the rare title these days of a self certification (self-cert) mortgage as NO income verification is required. Stonehaven class the payment of interest as a ‘contribution’ as such do not require proof of any income. The Stonehaven Interest Select plan also has the added facility of selecting the amount of interest you wish to pay. Stonehaven will allow a contribution of anywhere between £25pm upto the full interest payment so one can fit the monthly payment in with their budget.
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Should not all the interest be repaid, then there will be an element of roll-up onto the original capital raised. The balance will therefore increase over the years, but not as great as otherwise would be if no payment was made at all. This could be great news for the children or beneficiaries who wish to maximise the amount they receive at the end of the day.
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After the shock withdrawal of Prudential at the end of 2009, Stonehaven was one of only a number of remaining providers including Just Retirement, Aviva & LV= who expressed commitment to the sector.
Stonehaven’s existing lifetime mortgage customers have received continued good servicing & they have pledged to meet all the existing terms and conditions.
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New applications, supported by relevant Key Facts Illustration can only be processed by qualified financial advisers such as Equity Release Supermarket & cannot be done direct. Applications must include a cheque to cover the valuation fee.
Offers made by Stonehaven are normally valid for a period 3 months & if you are considering an alternative to the Halifax Retirement Home Plan then the Stonehaven Interest Select plan can meet your requirements.
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If you have any enquiries or questions you wish to ask then please contact the Equity Release Supermarket team on 0800 678 5159.
Mark Gregory CeMap CeRER
mark@equityreleasesupermarket.co.uk
Tags: Aviva, equity release, equity release schemes, Just Retirement, lifetime mortgages, LV=, Stonehaven
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