Aviva offers a range of products like their Lump Sum Maximum Plan and the Aviva Lifestyle Flexi Plan. There are going to be differences between these two products which is going to determine how much of the percentage of property value you can gain as a maximum lump sum. Before you use the Aviva equity release calculator it is best to understand how the percentage of property value is attained.
Age always Factors into the Calculation
No matter the product from Aviva or the entire equity release market, you need to know age is a definite factor in the calculation. Age determines where you are in your life and how much of it there is left. There is a mortality indices table which tells mortgage companies the average age a person will live to based on health, current age, and lifestyle. This index is used to come up with a value for every 5 to 10 years which is considered the percentage of property value.
On the premise that a younger person is going to live longer, a company is most often going to offer a lower maximum amount than they would for an older person who is going to die a lot sooner. It can be a little cold to think about it in this way, but that is what lending companies will do.
Property Value is the Maximum Amount
The property value is also going to determine the maximum amount because the percentage of property value is derived from the current market value of your home. Once an age is established for the youngest home owner a percentage can be derived. Aviva equity release calculator results will then give you a value in pounds based on the percentage your age allows. The following information is an indication of 2014 values for the Aviva Lifestyle Flexi Plan only.
• Age 55 is allowed 13%
• Age 60= 18%
• 65 = 23.5%
• 70 = 32%
• 75 = 36%
• 80 = 41%
• 85 = 45%
The Flexi plan is only available from 55 to the age of 85, unlike the Max plan which is up to 90 years of age. As you can see the percentage will increase with age. You should also be aware that the percentage of property value is approximately 7% lower than the Aviva Lump Sum Max plan. At the age of 65, under the Max plan, a homeowner can take out 30% of their home. With the Flexi plan at age 65, only 23.5% can be withdrawn in a lump sum.
Calculating the Amount Awarded
As you have values it is now time to consider property value based on the percentage. A home that is £100,000 in value would give you a maximum amount of £30,000 at the age of 65 under the Max plan. For the same age and home value under the Flexi plan you would attain approximately £23,500 in a loan as the maximum amount.
Other Products Provided in the Market
Aviva is not the only company to offer equity release plans. There are others with different 2014 loan to value percentages. They still work off the same premise of providing a certain percentage based on your age. They may also be similar in the maximum potential. There are a few things that determine the amount which have not been discussed.
The interest rate is going to vary based on competitive industry rates. Independent products tend to have competitive rates, whereas products from the company will not be as competitive. You may find the loan to value percentage is actually lower by talking with a company directly because of the higher interest rate.
By speaking with an independent broker who is able to examine all products on the market and not just Aviva specifically, you may find a better equity release plan is available to you. It of course depends on what is going on in your life, your age, and the property value. Still, it is one way to ensure you are getting the best product for you and your home.
As you use the Aviva equity release calculator you should input the youngest homeowner’s age. The values above are based on a single homeowner, which naturally means they are the youngest. If you have more than one homeowner such as a spouse, you need to use the youngest age as this is the value the equity release company is going to use.