It’s good to stay flexible. That’s why we’re introducing ‘downsizing protection’ on all our lifetime mortgages applied for on or after 08 April 2019.
In the past, if a client wanted to move to a new home which didn’t meet our lending criteria, they’d have to repay their lifetime mortgage to do so. And they may be faced with an early repayment charge as a result.
But thanks to downsizing protection, that’s no longer the case.
Greg Neilson, Retirement Managing Director at Aviva, said: “We understand that clients’ circumstances can change over time, often without warning. For instance, they might need more support and choose to move into sheltered accommodation. Or they may decide they want to move closer to family or friends to make the most of their retirement.
“By bringing in downsizing protection we’re giving customers the reassurance that if they do need to move to a property that doesn’t meet our lending criteria, they won’t face an early repayment charge for it.
And what’s more, unlike with some providers, to benefit from this feature customers only need to have held their lifetime mortgage for three years.”
How downsizing protection works
If your client is moving house but their new property doesn’t meet our lending criteria, they won’t be able to move their lifetime mortgage to their new home – and will have to repay the loan in full.
However, assuming they are eligible for downsizing protection, they won’t have to pay an early repayment charge – leaving them potentially thousands of pounds better off than they would have been previously.
“Equity release has been one of the biggest financial success stories of the recent past, with 83,000 people using it last year alone to unlock a more comfortable retirement,” added Mr Neilson.
“Aviva is already one of the longest established and most trusted equity release lenders in the market. This move, coupled with the fact that we already offer a No Negative Equity Guarantee as standard – plus an optional Inheritance Guarantee – creates a more flexible product that customers can feel confident taking out.”
Please note: this feature is available on all of our lifetime mortgages applied for on or after 08 April 2019 . To benefit from downsizing protection, your client must have held their plan for three years or more.
- For more support to help you have more fruitful equity release conversations with clients download our summary pdf.
Equity Release Council 2018 lending figures: https://www.equityreleasecouncil.com/document-library/q4-2018-lending-figures-press-release/