Aviva offers a max plan, flexi plan, and Aviva Enhanced Lump Sum plan. Each of these plans is going to have a different loan to value percentage which determines how much you can actually release as the maximum amount. The reason for the different equity release plans is simple. Each one is targeting a specific type of consumer. In the case of an enhanced plan there is ill health of the youngest homeowner, which factors into the calculation.

Ill Health and Age
To understand how ill health can actually be a help to releasing equity, you must first know about lifetime mortgages. Aviva offers lifetime mortgages where the repayment is not made until death or the person is in need of care. When the home with a lifetime mortgage is no longer the main residence for the person the home is either sold to repay the loan or the person has to have another means like life insurance paying out after death.

The loan is to be repaid in full plus any compounded interest. The interest adds up on the loan which is why the full market value of the home cannot be released in a loan. Furthermore, as the mortgage could be outstanding for four decades the lender has to be wise with the percentage of loan to value they are willing to offer.

The general premise of lifetime mortgages is that someone 55 will live longer than a person aged 90. In other words a 55 year old might have up to 45 years left by reaching 100 before they die. A person of 90 would have 10 years.

With an enhanced lifetime mortgage and therefore an enhanced lifetime mortgage calculator result, the premise changes. A person with ill health is not going to live as long as a healthy person of the same age; therefore, the company can comfortably lend more in a maximum amount than a health person would be able to get.

Property Value Percentage
After answering some questions about your health, the Aviva enhanced equity release calculator would be able to give you a value. It is of course based on age and property value too.

In 2014 there are already set loan to value percentages based on the enhanced mortgage. These values are based on a single homeowner, thus that age is used. If there is more than one homeowner only the youngest homeowner’s age is going to count in the calculation.

For age 55 to 85 in five year increments the percentages are as follows:
• 24%
• 29%
• 34%
• 39%
• 44%
• 49%
• 54%

If you are 55 years of age the percentage of property value would be 24% where as someone 65 years old would be able to take out 34% and someone 85 years old would get the maximum allowable amount of 54%.

Looking at Enhanced versus Standard
Standard values are different than enhanced for the Aviva products. A healthy person age 65 would be able to release 30% and up to 52% at the age of 90. As you can see although the age for an enhanced lifetime mortgage only goes to 85 the person actually receives 2% more than someone age 90 in good health.

In terms of the calculation take £100K as the property value with the client age 65. This would be 30% of the property value thus £30K is provided for the max plan from Aviva. An enhanced result would be £34,000.

No one wants to be ill, but if you are it could work in your favour by releasing more equity so you can enjoy your retirement.

What Happens Next
Once you have a value from the calculations it is time to decide if the enhanced equity release product from Aviva is actually going to help you. You have arrived at a value using the enhanced equity release calculator. This value is based on the worst case scenario of your health. You may not be in the worst case situation yet, which would mean a lower value given to you.

For this reason you want to double check your enhanced equity release calculations with an independent broker. This equity release broker would be able to look at your current health and find a deal that suits you as well as to make certain the value you were given is on target. They might be able to get you more depending on a more rounded questionnaire.