Lifestyle Flexible Option

The flexible way to release equity

Our Lifestyle Flexible Option could be ideal if your clients are looking for flexibility. After receiving an initial lump sum, they can withdraw money from a cash reserve, as and when they need it.

No repayments are normally needed, as the loan’s usually repaid in full from the sale of the property when your client dies or moves into long term care, subject to our terms and conditions.

The minimum total loan is £15,000. The amount available will depend on the age of the borrower(s) and the value of the property.

How to get a quote and apply

Our rates are based on your client’s individual circumstances, so please call us to get a quote for your customer.

0800 015 4909

Lines are open 8.30am to 5.30pm, Monday to Friday.

Ready to write business? Download an application form

Why choose Lifestyle Flexible Option for your clients?

Many clients enjoy the freedom and cost-effectiveness our Lifestyle Flexible Option affords them.

As well as receiving an initial lump sum (of £10,000 or more), it allows your client to set up a cash reserve (minimum £5,000), which they can draw money from when they need it. Choosing this type of plan could be more cost-effective than taking a single lump sum as your client only pays interest on the cash they draw down.

Your client continues to own their home, and they can live in it until they die or move into long-term care, subject to our terms and conditions. In the case of joint lifetime mortgages this applies to both partners. Interest builds up through the life of the mortgage and is charged on the amount borrowed and interest already added, which can quickly increase the amount owed. Your client won't have to pay tax on the amount they release, but it may affect their tax position and eligibility for certain welfare benefits. It will also reduce the amount of inheritance they can leave.

Great benefits as standard

Your client receives an initial tax-free lump sum which they can spend as they choose.
They don’t need to make any repayments during the loan term under normal circumstances (terms and conditions apply).
Interest rates are guaranteed for 14 weeks from when we receive the application form from you.
No upper age limit – whether your client is 55 or 105 they could make use of the equity in their home.
Online access – you and your client can see up-to-date policy details 24/7.

Additional funds when they're needed

Your client can release as little as £2,000 from their cash reserve at one time.
The most clients can leave in the cash reserve is 50% of the maximum amount they can borrow.
Minimum total loan of £15,000 (an initial loan of £10,000 with a reserve of £5,000).
No interest is payable until the money’s released.

Peace of mind

No negative equity guarantee: your client or their estate won’t have to pay back more than the property sells for (as long as it’s sold for the best price reasonably obtainable).
Optional inheritance guarantee: your clients may be worried that the inheritance they can leave will be reduced. The guarantee allows your client to safeguard a percentage of their home’s value for their beneficiaries.
Voluntary partial repayment: allows your client to repay 10% per year of the lifestyle mortgage.
Moving home option: your client may be able to transfer their lifetime mortgage to a new home (it must meet our lending criteria at time).
Your client may be able to borrow more in the future, though we can’t guarantee this and it would depend on our lending criteria at the time.

Enhanced rates

Clients with certain health or lifestyle conditions may be able to get a lower interest rate on their Lifestyle Flexible Option mortgage.

Limits and lending criteria

For more information, please read our Lending criteria document

Criteria	Limits	Additional information
Age limits	Minimum age:55 (no maximum)	For joint policies, both parties must be at least 55
Property value	Minimum value: £75,000 (no maximum)	With flats and maisonettes, 85% of the property’s value is used when calculating the loan
Loan amounts	Minimum loan: £15,000	The client must be able to set up a minimum total loan of £15,000, of which at least £10,000 must be taken straightaway, with a minimum of £5,000 in reserve
Loan amounts	Maximum loan: £600,000	Larger loans are considered on request
Loan to Value (LTV)	Minimum LTV 13%, minimum age 55	For more information about our LTVs (including possible enhanced rates which depend on your client's health and lifestyle) read our adviser guide
Loan to Value (LTV)	Maximum LTV 45%, age 85+	For more information about our LTVs (including possible enhanced rates which depend on your client's health and lifestyle) read our adviser guide
Cash reserve	Minimum withdrawal: £2,000	The most clients can leave in the cash reserve is 50% of the maximum amount they can borrow. We won't let a client set up a cash reserve with less than £5,000. Each withdrawal from the cash reserve must be a minimum of £2,000. If there is less than £2,000 in the reserve, the full amount must be taken at the next withdrawal
	Maximum withdrawal: none	Clients can withdraw as much as they like as long as sufficient funds are available in the reserve
	Maximum number of withdrawals: none	There is no limit to the number of times a client can withdraw from the reserve as long as sufficient funds are available
Residency	-	The property must be in England, Wales, Scotland or Northern Ireland, and cannot be in the Channel Islands or Isle of Man. It must be your client’s main residence and must meet our lending criteria. If the property is leasehold, the sum of the years remaining on the lease plus the age of the youngest borrower must equal at least 160 years.
Voluntary partial repayments	Minimum: £500 Maximum: 10% of total amount borrowed	Each year clients can repay a maximum of 10% of the amount they’ve borrowed. Up to four repayments can be made each year. Repayments can only be made after the loan has been held for one year and if there has been no additional borrowing in the previous 12 months. The payment will be applied to the mortgage on the day it is received and the amount on which we charge compound interest will reduce. This is only available to clients who applied for their lifetime mortgage on or after 28th April 2014.
Early repayment charge	Maximum: 25% of each amount borrowed	Clients may face an early repayment charge if they wish to repay the loan in full before they die or move into long-term care. The amount charged will apply to each amount the client has borrowed. In some situations an early repayment charge won’t apply – for details see our terms and conditions. No early repayment charge on first death only applies to customers who apply for their lifetime mortgage on or after 28th April 2014.

For full details of all our charges please see our Tariff of Charges

Overview

Charge	Details
Interest	Calculated on a daily basis and compounded annually.
Arrangement fee	This will be shown in your client’s Key Features Illustration.
Early repayment charge	Early repayment charges may apply if the loan is repaid for any reason other than those mentioned in our terms and conditions.This could be up to 25% of the loan value, including any additional borrowing or cash reserve releases. There may also be an administration fee. For full details see our Tariff of charges
Legal fees	Your client is responsible for paying their own legal fees. Aviva's legal costs and any disbursements are covered by the arrangement fee. Full details of these costs can be found in the Tariff of Charges
Commission	2.25% of the initial loan plus 0.75% of the reserve
Re-valuation fee	If your client’s application takes longer than six months to process they’ll need another property valuation. See our Tariff of charges for details
Re-inspection fee	£60 if the home needs to be re-inspected (eg after essential repairs have been carried out)
Additional borrowing fees	Please see our Additional borrowing brochure and Tariff of charges for applications on or after 28 April 2014.

Valuation fees

Property value	Valuation fee
£75,000 – £150,000	£153
£150,001 to £300,000	£210
£300,001 to £500,000	£295
£500,001 to £750,000	£480
£750,001 to £1,000,000	£685
£1,000,001 to £1,100,000	£920
£1,100,001 to £1,200,000	£1,120
£1,200,001 to £1,500,000	£1,270
£1,500,001 to £2,000,000	£1,420
Over £2,000,000	Speak to your usual Aviva contact to find out more. If you don’t have one, please contact us.

Who is Lifetime Flexible Option suitable for?

It's been designed for clients who:

are homeowners aged 55 or over who need to raise capital
have no mortgage or can pay off their mortgage with the proceeds of the loan
have a minimum property value of £75,000
need to borrow at least £15,000 (the minimum available under our lending criteria)
require a fixed rate of interest throughout the term of the lifetime mortgage
live in the UK (excluding the Channel Islands and the Isle of Man).

It’s unlikely to be suitable for clients who:

have savings or other money they could use first
would prefer to sell all or part of their home rather than take a loan
already have a large mortgage which they wouldn’t be able to pay off with the proceeds of the loan
would prefer to sell the property and downsize.

Things you client should do:

Involve their family in the decision.
Ensure both parties (in the case of couples) understand the commitment.
Consider the impact on their state and welfare benefits.
Consider whether releasing equity could affect their tax position.
Consider how releasing equity will reduce the amount of inheritance they can leave.
Ensure they’re prepared to commit to this for life, as early repayment charges could be expensive.
Ensure they understand the costs involved, particularly the build up of interest throughout the life of the mortgage.

Possible alternatives to using this product:

Sell or use other assets.
Take a standard secured or unsecured loan, if they can afford the repayments.
Sell their home and downsize.
Adjust their standard of living.
Move in with children.
Borrow money from family.
Sell part or all of their home using a home reversion plan.
Local authority or other type of grant.

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