Benefits always exist for financial tools that help you make a decision; however, there will be disadvantages too. Understanding the tool such as the Aviva equity release calculator will help you determine whether it is a tool you want to use or if you need an independent equity release calculator.
Aviva is a well-known company with several equity release products on the market. If you are a retiree, you may find Aviva has a product that interests you. What you should understand is that Aviva is not a brand for every consumer. Your circumstances are going to determine whether or not the Aviva equity release calculator can be of help to you.
This calculator is designed for Aviva products. The results you obtain from the calculator will be based on the amount of equity Aviva is willing to lend based on your age and home valuation. It is not a representation of independent products; therefore, if you want to understand the various products available to you in the market, you need an independent equity release calculator to help you determine the highest maximum release throughout the entire market and not just what Aviva is willing to lend you.
It works great to get the results for Aviva products so you have an accurate guide to use as you look about for the right product for you.
To provide an example at age 65, Aviva, Just Retirement, and Pure Retirement offer 30% loan to value percentage, but Pure Retirement offers a larger cash back amount, free valuation of your home, and they will not charge an application fee if your loan amount is above £45,000. If you look at Aviva versus Pure Retirement at age 65, you see 41% Aviva to 42% Pure Retirement.
Explaining Loan to Value
To put these details into more perspective, you need to understand what loan to value percentage means. First, you need to have an age the company is willing to lend money to. All equity release products for retirees such as lifetime mortgages require a minimum age of the youngest house owner to be 55; while home reversion requires you to be 65 as the youngest homeowner.
Lifetime mortgages are loans with interest compounding onto the principle amount. Both the interest and capital sum are to be paid at death or when you decide to move. Home reversion is not a loan and does not collect interest. You simply live in the home until you decide to move or death occurs, then sell the rest of the home to the company. You sell the home in full or part to get retirement tax free cash with home reversion.
Back to loan to value percentage, your age determines your mortality on an index. The older you are the least amount of time you have left of life. This is the assumption of the lender; therefore, it is reasonable to provide a higher lump sum to you at an older age, since the money will not be outstanding for as long.
The second part of the calculation and thus percentage is the housing value. Your home has to be worth at least £60,000 with most companies. Say you own a home that is valued at £100,000, you are 65 years of age and the company is willing to offer up to 30% as the maximum amount in an equity release, this means you will get a loan of £30,000 at the company interest rate which could be 5.65%. Your £30,000 at a fixed interest rate could double in the next 10 to 12 years, and again in another 10 to 12. This is why the value of the home has to account not only for the loan to value percentage, but the interest that is going to accrue.
It is also why the loan to value percentage that determines the maximum loan amount can be lower with certain companies.
In Short Independent Results
As you can see you want to have independent results from calculations as well as Aviva equity release calculator results as a way to determine the overall best product for you. You may need the maximum amount that can be lent. You may feel it would be too much to pay back later. You won’t know until you have looked at all the products, done a few calculations, and made sure you are getting independent results for these products.
- Application Fee
- Aviva Equity Release
- Aviva Equity Release Calculator
- Aviva Products
- Equity Aviva
- Equity Release Calculator
- Equity Release Products
- Financial Tools
- Free Valuation
- Home Reversion
- Interest And Capital Sum
- Interest Compounding
- Interest Rate
- Just Retirement
- Lifetime Mortgages
- Loan To Value
- Pure Retirement
- Retirement Tax
- Tax Free Cash