My Mother in law (and late Father in law) took out an Equity release deal with NU (now Aviva) in early 2002
They did sign on the dotted line and had IFA advice (family member who was an IFA) ....they wanted to tuck some money away for the future plus pay off a few bills....although in truth they did not understand the nature and impact of the redemption penalty rules (few would..)
11 years on she is a lonely widow and wants to downsize from the house - her husband died 5 years ago now and she is lonely + its to big to heat and manage, the stairs are becoming a struggle for her and in truth we would prefer her nearer to us now in a retirement home and in a quieter area (she is in Bromley Kent).
we are over an hour away and want her 10 mins away ....Summary the £50k loan is now £118k......cant despute that .....but the redemption penalty clause states its based on the Redemption Gilt yield differential between Jan 2002 and the date of redemption for the UK 2028 6% Treasury bonds
ouch ! - current yield is around 2.7% vs 4.7% in 2002..........the rules state that even a 2% differential equates to a 50% penalty on the original loan (thats another £25k on top of the £118k)
The IFA family member died a few years back and the IFA came for a chat then - but were not interested in her as there were no more commissions to be earned ..........so I had to write to aviva last week to request full costs and terms if we do close out the Loan.........
we have the document and its £135k including a £15,000 redemption fee at current rates
I have written to my solicitor for advice
Meanwhile perhaps here I can request directly heres that someone at Aviva can review this contract now and reduce (or at least cap) the somewhat incredulous penalty fees ?
I read that in 2004 a (25%) cap was placed on the NU/Aviva penalty clauses due to the unfair nature of earlier agreements - so could I at least request that ?
my other issue is that due to the dynamic market I have no lock in to what this redemption will be until the actual day of redemption ........this means I am trying to agree a moving net price with the retirement home .......this is not good and is causing a lot of grief for the family as it will take a few months to sell the house and we need every penny to secure a nice property
and no I do not want any further offers of more equity release ..enough is enough
thanks to Aviva in advance for some urgent advice.........just a contact will do please