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Additional borrowingAviva lifetime mortgages

You should read this along with your illustration and ‘Tariff of charges’ leaflet.

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Talk to a financial adviserYour financial adviser can help you decide whether additional borrowing is right for you. You can’t take additional borrowing without receiving financial advice.If you don’t have a financial adviser you can find one near you at www.equityreleasecouncil.com Simply choose ‘Find a member’ and enter your postcode. Alternatively, you can give the Equity Release Council a call on 0300 012 0239.

Borrowing more money on your lifetime mortgageThere may come a time when you would like to borrow more money from your lifetime mortgage. This guide explains the process and fees involved. Please bear in mind that we can only accept an application for additional borrowing if you have received financial advice.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

Can I borrow more money?The type of lifetime mortgage you’ve got will affect when you can apply to borrow more money. Your mortgage offer will tell you which lifetime mortgage you’ve got if you’re not sure.

●● Lifestyle Lump Sum●● Lifestyle Lump Sum Max●● Lifestyle Flexible Option

●● You can apply to borrow more money at any time.

●● If you have a Lifestyle Flexible Option you need to have taken all of your cash reserve before you can take additional borrowing.

●● Fixed Rate Lifetime Mortgage●● Cash Reserve Option●● Index-Linked Lifetime Mortgage

●● Three years after you take out your lifetime mortgage, you can apply to borrow more money at any time.

●● You must wait three years from the last time you borrowed money before you can apply to borrow more. The exceptions to this are if you move home or change the ownership of the property.

●● If you are moving home or changing the ownership of your property you can apply to borrow more money at the same time provided it is at least 12 months since you last had additional borrowing.

We can’t guarantee that we’ll lend you more money. It will depend on our lending criteria at the time.

If you do borrow more money, it may affect your entitlement to welfare benefits and your tax position. It also means that the amount you can leave as inheritance will be reduced. In fact, unless you already have our inheritance guarantee, you may not be able to leave anything at all.

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How much could I borrow?Your Aviva lifetime mortgage is personal to you. The amount you can borrow is based on your personal circumstances and the type of lifetime mortgage that you have.

We’ll revalue your property before deciding how much we could lend you. Then we’ll work out how much you can borrow by comparing the amount you owe with the amount we could lend you if you were applying for a new lifetime mortgage.

If you chose an inheritance guarantee when you took out your lifetime mortgage, this will reduce the amount of extra money you may be able to borrow. This is because we base the maximum loan you can take out on the value of your property that isn’t covered by the guarantee.

If the inheritance guarantee you’ve chosen will stop you borrowing as much as you need, you can either reduce the amount of the guarantee or remove it altogether. Your financial adviser can help you decide what’s best for you.

Working out how much you oweWe’ll add the interest that’s already built up to the amount you’ve borrowed. Because we charge interest daily, we’ll only be able to give you a rough idea of how much you can borrow to start with. We’ll then let you know the final amount when we send out your additional borrowing offer document.

You may be able to borrow more money if the amount we could lend you is at least £5,000 more than the amount you already owe.

You still keep your no negative equity guarantee if you borrow more. All our lifetime mortgages have a no negative equity guarantee. It means that neither you nor your estate will ever pay back more than your home is sold for, as long as your home is sold for the best price reasonably obtainable. Terms and conditions apply.

Here are some examples of how we calculate how much extra money you can borrow:

Lifestyle Lump Sum Max

Lifestyle Lump SumFixed Rate Lifetime

MortgageLifestyle Flexible Option

Cash Reserve Option

Index-Linked Lifetime Mortgage

Existing loans plus interest £60,000 £60,000 £60,000

Current property value £250,000 £250,000 £250,000

Loan to value based on age 75 41% 36% 38%

Amount we may loan to a new customer £102,500 £90,000 £95,000

Extra money you could borrow £102,500 - £60,000 = £42,500 £90,000 - £60,000 = £30,000 £95,000 - £60,000 = £35,000

In this example you could take a cash sum of between

£5,000 and £42,500 £5,000 and £30,000 £5000 and £35,000

If you have a Lifestyle Flexible Option or Cash Reserve Option, you must take at least £5,000 as cash, but you can choose to set up a cash reserve with the rest of the money. The cash reserve must be set up for at least £5,000. If you have the Cash Reserve Option product and you choose to set up a reserve, this reserve will be available for 10 years from the date it is set up.

You must have taken all of your cash reserve before you can take additional borrowing.

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Will I get the same interest rate as I did for my original loan?We review our interest rates regularly, so it’s possible that the interest rate we charge on any additional borrowing could be different to the rate you’ve got on other loans from us.

We’ll offer you the interest rate that’s current when we receive your application to borrow more money. We guarantee that rate if you complete within eight weeks. If it takes longer than that to complete, we’ll offer you the interest rate that applies on the completion date.

When you borrow more money, we charge interest on the total amount you have borrowed. This means the total amount you owe quickly adds up.

If you have a Lifestyle Flexible Option or Cash Reserve Option and set up a cash reserve, you won’t pay any interest on the money in the reserve until you take it out. When you take the money out, we’ll charge the interest rate that applies on that day.

You can ask your financial adviser for a key facts illustration or give us a ring on 0800 158 4177 to find out the current rate.

What are the charges?Application fee You’ll have to pay an application fee when you apply to borrow more money. We’ll add this to your loan

amount. Please check our ‘Tariff of charges’ leaflet for the current application fee. Please note, we update our tariff of charges from time to time.

Revaluation fee We may need to send a valuer to assess your property if you apply to borrow more money.

You may not have to pay a revaluation fee if you’re applying to borrow extra money at the same time as you’re:

●● adding someone else onto your plan

●● moving and transferring your lifetime mortgage to your new property.

We’ll use the valuations required to complete these transactions to also work out how much we can lend you.

If you’re applying for any other reason, we’ll need to get your property revalued. The revaluation fee depends on the estimated value of your home. Please read our ‘Tariff of charges’ leaflet for more information about this.

We won’t accept any other valuations (for example, from estate agents).

Once the revaluation has taken place we won’t be able to refund the fee.

Re-inspection fee You may have to pay a re-inspection fee if the valuer has to return to assess your property again for any reason.

When the valuer assesses your property, they may recommend that you need a specialist report. To be able to carry on with your application, you will need to get this. If the report says that your property needs essential repairs then to satisfy the term and conditions of your mortgage you must make sure these repairs are done to a sufficient standard, even if you don’t end up borrowing any extra money.

When you’ve had the work done, the valuer may need to re-inspect your property. If this happens, you’ll need to pay a re-inspection fee. Please see our ‘Tariff of charges’ leaflet to find out the current re-inspection fee.

We’ll send you a copy of the valuer’s report for your records, but please note that this report is prepared for the purpose of your lifelime mortgage only and the value of your property could change in the future.

Legal fees You won’t have to instruct a legal adviser unless you’re applying for extra money at the same time as moving or changing who owns your home. If this is the case, you’ll be responsible for paying any legal fees.

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When do I have to repay my lifetime mortgage in full?That depends on whether you have a joint mortgage with another person.

If you have borrowed alone:Your lifetime mortgage is due to be repaid in full when you die or you need to leave the property permanently to go into long-term care. Our terms and conditions at the time will explain what this means.

If you have borrowed with another person:Your lifetime mortgage is due for repayment in full when the last person needs to permanently leave the property to go into long-term care, or when they die, whichever happens first.

Can I repay my lifetime mortgage in full, before I die or go into long-term care?Your lifetime mortgage isn’t designed to be repaid in full before you die or go into long-term care. If you want to repay your lifetime mortgage early and the below exclusions don’t apply, you may be subject to an early repayment charge. If you intend to pay off your lifetime mortgage in full, you should discuss this with your financial adviser. If you decide to go ahead, the following will apply to any early repayment charge you may have to pay:

●● The early repayment charge will never be more than 25% of your initial loan amount plus 25% of any additional amounts you’ve borrowed.

●● If you take the Lifestyle Flexible Option and want to repay it, you may also have to pay an early repayment charge of up to 25% on each amount you’ve taken from your cash reserve.

●● If you applied for your lifetime mortgage or any additional borrowing before 18 April 2011, you’ll also have to pay an administration fee for each loan you took out. Please see our ‘Tariff of charges’ leaflet to find out the current administration fee. This doesn’t apply to any money you’ve borrowed from your cash reserve.

Circumstances in which an early repayment charge doesn’t apply;

●● You have a joint lifetime mortgage and you repay it within three years of the date that your partner dies or from the date that you notify us that one of you needs long-term care. This only applies to those who applied for their lifetime mortgage on or after 28 April 2014.

●● When you – and all borrowers on the lifetime mortgage have either died or moved into long-term care.

●● You move property and transfer your lifetime mortgage to the new property. The property that the lifetime mortgage is being transferred to must meet our current lending criteria. If you move to a property that’s worth less than your current home you may be required to repay part of your loan and the interest you owe.

●● You want to move and apply to transfer your lifetime mortgage to a new property that doesn’t meet our current lending criteria. If you’re eligible for downsizing protection you can repay the lifetime mortgage with no early repayment charge. This feature is available on lifetime mortgages applied for on or after 8 April 2019. Please see your terms and conditions for more information.

●● You want to sell part of your property and we have given you consent to do this.

●● You’d like someone to move into the property with you as a joint borrower and for the lifetime mortgage to be repayable when the last person dies or goes into long-term care (and we have given you our consent).

●● If you’re making voluntary partial repayments. This facility is available on lifetime mortgages applied for on or after 28 April 2014. Please see your terms and conditions for more information.

The value of yields on gilts (UK government bonds) will have an impact. The gilt yield at the time of repayment has a direct relation to whether an early repayment charge is payable. Your financial adviser will be able to explain this to you and it’s also described in your terms and conditions.

Where can I find out more?You can find more information about your lifetime mortgage in the terms and conditions.

Please read your personalised key facts illustration and the ’Tariff of charges’ for more information on the charges that apply to your mortgage, including our interest rates.

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8PF01962 10/2019 © Aviva plc

Aviva Equity Release UK Limited. Registered in England No 3286484. Aviva, Wellington Row, York, YO90 1WR. Authorised and regulated by the Financial Conduct Authority. Firm Reference Number 310433.

aviva.co.uk

Contact usWe’re here to help you with any aspect of your lifetime mortgage. You can contact us at any time.

Call us on 0800 158 4177Lines open: Monday to Friday 8am to 8pm Saturday 9am to 5pm Sunday 10am to 4pm Closed bank holidays

Calls may be monitored or recorded.

Write to us at:Aviva Equity Release UK LimitedPO Box 520Surrey StreetNorwichNR1 3WG

Visit our website:aviva.co.uk/equity-release

Braille, large font and audio materialYou can order our literature in Braille, large font or audio.

Just call 0800 068 6800 or email contactus@aviva.com and tell us:

●● the format you want

●● your name and address

●● the name or code of the document. The code is usually in the bottom left hand corner on the back of most documents.

The Customer Call Centre is open Monday to Friday, 8am to 8pm, Saturday from 9am to 5pm and on Sunday 10am to 4pm.

We may monitor or record calls for your protection and ours.

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