The product replaces Aviva’s Lifestyle Flexible Option product.
Borrowers will receive the bonus uplift to pay off the interest every time they make a voluntary partial repayment, whether it is a one-off or regular. The bonus uplift will be funded by Aviva.
The interest-servicing uplift percentage rate will be set at the start of the mortgage and remain the same throughout. If borrowers pay back more than the interest due in the current year, the additional amount will go towards paying off the interest-bearing balance. However, no uplift will be applied to the additional amount.
Borrowers have the option to make voluntary partial repayments and can start, stop or change their repayments at any time.
Aviva said the flexibility of not having to commit to a set amount or regular payments would help with a borrower’s financial management, in case their circumstances change.
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Kay Westgarth, head of distribution at Aviva Equity Release, said: “We are delighted to be announcing the launch of this new feature, which will be applicable on all new Lifestyle Flexible Advantage products from today.
“We believe this is truly market-leading and offers the maximum flexibility to customers choosing to make voluntary partial repayments, meaning they are in control of their borrowing.”
Westgarth added: “This feature adds much-valued flexibility to our equity release products. We have also developed a projection tool that advisers can use with their clients as they go through the advice process, so they can create scenarios to help customers understand their options.
“We are continually looking at how we can develop our products to meet customer needs, based on feedback, and believe that this is an important forward step in the market.”
