Can you reduce the amount of interest on a lifetime mortgage?
If you want to keep the overall cost of the lifetime mortgage down, you could choose a lifetime mortgage that allows you to repay some, or all of the interest without incurring an early repayment charge. Over half of the products offered by members of the Equity Release Council allow you to do this.
Other optional features that can help include:
Drawdown reserve: This lets you release an initial amount of money and create a reserve account that you can draw down on as and when you need it. You don't owe any interest on the money in your reserve account unless you actually access it, so compound interest accrues more slowly.
Downsizing protection: If you decide to sell your home and move to a smaller property, this protection lets you repay your loan without having to pay an early repayment charge.
Why compare equity release interest rates?
Whether you choose to do it yourself or with the help of a qualified IFA or broker, comparing equity release could help you find the lowest interest rates on the market. By comparing plans, you can see at a glance which providers offer the best lifetime mortgage interest rates.
- If you’ve started to compare equity release yourself, there are a number of things to consider in addition to the interest rate charged:
- Would you prefer the lump sum option that allows you to take the money in one go, or the drawdown option that gives you opportunity to hold money in reserve for future use?
- Would you like to guarantee that some equity is left for family to inherit?
- Would you like to reduce the overall cost of equity release by repaying some or all of the interest?
So, although interest rates are important, when you compare equity release you should also consider how the lifetime mortgage works and the flexibility it offers you - which is where a qualified equity release specialist could help.
How can I find the best equity release rates in 2024?
To help you find the best equity release rates, you may want to get the help of a specialist IFA or broker who can compare equity release on your behalf.
We work in association with Age Partnership, an equity release specialist who compare lifetime mortgage interest rates and products with a selection of the UK’s leading providers. They provide initial advice for free and without obligation. Only if you choose to proceed and your application completes would a fee be payable - which can usually be taken from the cash sum.
Through their relationships, they have secured preferential lifetime mortgage rates that you may not be able to get elsewhere.
They will talk through your requirements, fully explain how equity release works; help you consider whether it’s right for you or if other options are available such as downsizing and provide you with comparisons and a written illustration that you can talk through with your family.
Try the no obligation calculator