Aviva Endowment Loan
in Mortgages & endowments
4 replies 137 views
I really hope someone help me??
I am emailing on behalf of my 87yrs old Father.
In Jan 2005 my Father took out an "Lifetime Mortgage loan" for £30.000 for home improvements. At the time of this my parents had already paid off their mortage, so this is what is now called "equity release"
At the time of this, my Father wasn't advised onto how much the repayments would be? or how much the interest would be etc. So as I understand, he was lead to believe that the amount of £30.000 would be taken off from the sale of the property, or in the event of their passing.
The loan/equity release was taken out with Aviva.
Latest MSE News and Guides
Did you know there's an MSE app?
It's free & available on iOS & AndroidMSE App
Regifting: good idea or not?
Add your two cents to the discussionMSE Forum
Energy Price Guarantee calculator
How much you'll likely pay from AprilMSE Tools
I'm sure your 70 year old father who decided to take out the loan didnt think it was interest free for life.
If its a lifetime mortgage then there is no repayment until they die or go into long term care.
If "there is no repayment until they die" how come this loan has doubled in price?
Lifetime mortgages normally have a no negative equity clause and so ultimately its a gamble by the insurer against both longevity and house prices. Whilst your father was 70 when he took the loan you can get one at age 55 which in theory someone could go on to live over another 55 years from that date owing a debt continuing to accumulate interest.