| Period | Loan Amount | Interest |
|---|---|---|
| Month 1 | £0 | £0.00 |
| Month 2 | £0 | £0.00 |
| Month 3 | £0 | £0.00 |
| Month 4 | £0 | £0.00 |
| Month 5 | £0 | £0.00 |
| Month 6 | £0 | £0.00 |
| Month 7 | £0 | £0.00 |
| Month 8 | £0 | £0.00 |
| Month 9 | £0 | £0.00 |
| Month 10 | £0 | £0.00 |
| Month 11 | £0 | £0.00 |
| Month 12 | £0 | £0.00 |
| Year 2 | £0 | £0 |
| Year 3 | £0 | £0 |
| Year 4 | £0 | £0 |
| Year 5 | £0 | £0 |
| Year 6 | £0 | £0 |
| Year 7 | £0 | £0 |
| Year 8 | £0 | £0 |
| Year 9 | £0 | £0 |
| Year 10 | £0 | £0 |
| Year 11 | £0 | £0 |
| Year 12 | £0 | £0 |
| Year 13 | £0 | £0 |
| Year 14 | £0 | £0 |
| Year 15 | £0 | £0 |
| Period | Loan Amount | Interest |
|---|---|---|
| Month 1 | £0 | £0.00 |
| Month 2 | £0 | £0.00 |
| Month 3 | £0 | £0.00 |
| Month 4 | £0 | £0.00 |
| Month 5 | £0 | £0.00 |
| Month 6 | £0 | £0.00 |
| Month 7 | £0 | £0.00 |
| Month 8 | £0 | £0.00 |
| Month 9 | £0 | £0.00 |
| Month 10 | £0 | £0.00 |
| Month 11 | £0 | £0.00 |
| Month 12 | £0 | £0.00 |
| Year 2 | £0 | £0 |
| Year 3 | £0 | £0 |
| Year 4 | £0 | £0 |
| Year 5 | £0 | £0 |
| Year 6 | £0 | £0 |
| Year 7 | £0 | £0 |
| Year 8 | £0 | £0 |
| Year 9 | £0 | £0 |
| Year 10 | £0 | £0 |
| Year 11 | £0 | £0 |
| Year 12 | £0 | £0 |
| Year 13 | £0 | £0 |
| Year 14 | £0 | £0 |
| Year 15 | £0 | £0 |
| Period | Loan Amount | Interest |
|---|---|---|
| Month 1 | £0 | £0.00 |
| Month 2 | £0 | £0.00 |
| Month 3 | £0 | £0.00 |
| Month 4 | £0 | £0.00 |
| Month 5 | £0 | £0.00 |
| Month 6 | £0 | £0.00 |
| Month 7 | £0 | £0.00 |
| Month 8 | £0 | £0.00 |
| Month 9 | £0 | £0.00 |
| Month 10 | £0 | £0.00 |
| Month 11 | £0 | £0.00 |
| Month 12 | £0 | £0.00 |
| Year 2 | £0 | £0 |
| Year 3 | £0 | £0 |
| Year 4 | £0 | £0 |
| Year 5 | £0 | £0 |
| Year 6 | £0 | £0 |
| Year 7 | £0 | £0 |
| Year 8 | £0 | £0 |
| Year 9 | £0 | £0 |
| Year 10 | £0 | £0 |
| Year 11 | £0 | £0 |
| Year 12 | £0 | £0 |
| Year 13 | £0 | £0 |
| Year 14 | £0 | £0 |
| Year 15 | £0 | £0 |
| Period | Loan Amount | Interest |
|---|---|---|
| Month 1 | £0 | £0.00 |
| Month 2 | £0 | £0.00 |
| Month 3 | £0 | £0.00 |
| Month 4 | £0 | £0.00 |
| Month 5 | £0 | £0.00 |
| Month 6 | £0 | £0.00 |
| Month 7 | £0 | £0.00 |
| Month 8 | £0 | £0.00 |
| Month 9 | £0 | £0.00 |
| Month 10 | £0 | £0.00 |
| Month 11 | £0 | £0.00 |
| Month 12 | £0 | £0.00 |
| Year 2 | £0 | £0 |
| Year 3 | £0 | £0 |
| Year 4 | £0 | £0 |
| Year 5 | £0 | £0 |
| Year 6 | £0 | £0 |
| Year 7 | £0 | £0 |
| Year 8 | £0 | £0 |
| Year 9 | £0 | £0 |
| Year 10 | £0 | £0 |
| Year 11 | £0 | £0 |
| Year 12 | £0 | £0 |
| Year 13 | £0 | £0 |
| Year 14 | £0 | £0 |
| Year 15 | £0 | £0 |
| Period | Loan Amount | Interest |
|---|---|---|
| Month 1 | £0 | £0.00 |
| Month 2 | £0 | £0.00 |
| Month 3 | £0 | £0.00 |
| Month 4 | £0 | £0.00 |
| Month 5 | £0 | £0.00 |
| Month 6 | £0 | £0.00 |
| Month 7 | £0 | £0.00 |
| Month 8 | £0 | £0.00 |
| Month 9 | £0 | £0.00 |
| Month 10 | £0 | £0.00 |
| Month 11 | £0 | £0.00 |
| Month 12 | £0 | £0.00 |
| Year 2 | £0 | £0 |
| Year 3 | £0 | £0 |
| Year 4 | £0 | £0 |
| Year 5 | £0 | £0 |
| Year 6 | £0 | £0 |
| Year 7 | £0 | £0 |
| Year 8 | £0 | £0 |
| Year 9 | £0 | £0 |
| Year 10 | £0 | £0 |
| Year 11 | £0 | £0 |
| Year 12 | £0 | £0 |
| Year 13 | £0 | £0 |
| Year 14 | £0 | £0 |
| Year 15 | £0 | £0 |
Results are instantly displayed on screen
Our easy to use calculator will help you quickly determine the:
We are finance specialists, not sales people!
Once you click the calculate button, you will instantly see details of some of the options available to you.
Our online calculator is designed to provide you with an accurate as possible guide. The calculations are based on our most popular options and will provide you with information about:
You can enter any loan amount between £10,000 and the maximum based on the value of your property and your age. Our lifetime mortgage calculator will display the total interest costs for each year up to 15 years.
Currently, interest rates range from 4.16% to 6.94% MER (Monthly Equivalent Rate).
The main determining factors for what interest rate you will receive on your lifetime mortgage are:
Did you know?
The recent Bank of England interest rate rises have increased rates slightly, however increased competition within the equity release and lifetime mortgage markets, has led to interest rates becoming increasingly competitive over the last year or so.
Currently starting from 4.34% MER for the lowest loan to value plans, with interest rates increasing up to 6.94% MER for the highest loan to value plans.
The majority of lifetime mortgage plans are typically arranged between 4.34% MER and 5.15% MER.
There is a direct link between the interest rate and the ratio of loan to value borrowing, so to secure the best interest rate you need to be borrowing less than the maximum amount available to you. If you borrow the maximum that you can, the interest rate is likely to be around 6.5% MER.Some plans do include free legal fees or a contribution to them.
Roll-up Interest - Under a roll-up interest plan you won’t need to make any monthly repayments for the duration of the loan. The interest will be added to the original loan amount, normally on an annual basis.
The outstanding balance will therefore increase over the life of the mortgage as interest is charged on the full amount owed.
This is known as compound interest as interest is charged, not only on the original loan, but also on the interest that has been applied to date. Depending on the term of the loan, this could build up over time to a substantial sum over and above the original loan amount.
Unless you repay the loan early, the interest that has accrued, along with the original loan amount, will be deducted from the sale of the property when you either pass away or go into long term care.
Interest Only - Under an interest only plan you can repay all, or a proportion of, the interest each month. This will reduce the overall cost of the loan as the interest won’t build up each month, therefore reducing or eliminating any compound interest charges.
If you pay the full interest amount each month, the settlement figure at the end of the loan term will just be for the loan amount released plus any redemption fees or set up costs (if applicable).
The tables below illustrate how much the interest rate will affect the total amount you will need to repay. The examples compare the repayments over a period of five, ten and fifteen years with example compound interest rates of 3%, 4%, 5% and 6%.
Based on an annually rolledup lifetime mortgage loan of £50,000 with a compound interest rate of 3%
| Year | Loan | Interest at 3% | Total Owed |
|---|---|---|---|
| 1 | £50,000 | £1,500 | £51,500 |
| 2 | £51,500 | £1,545 | £53,045 |
| 3 | £53,045 | £1,591 | £54,636 |
| 4 | £54,636 | £1,639 | £56,275 |
| 5 | £56,275 | £1,688 | £57,963 |
| 10 | £57,963 | £1,739 | £59,702 |
| 15 | £59,702 | £1,791 | £61,493 |
Based on an annually rolled uplifetime mortgage loan of £50,000 with a compound interest rate of 4%.
| Year | Loan | Interest at 4% | Total Owed |
|---|---|---|---|
| 1 | £50,000 | £2,000 | £52,000 |
| 2 | £52,000 | £2,080 | £54,080 |
| 3 | £54,080 | £2,163 | £56,243 |
| 4 | £56,243 | £2,250 | £58,493 |
| 5 | £58,493 | £2,340 | £60,833 |
| 10 | £71,166 | £2,847 | £74,013 |
| 15 | £89,830 | £3,593 | £93,423 |
Based on an annually rolled uplifetime mortgage loan of £50,000 with a compound interest rate of 5%.
| Year | Loan | Interest at 5% | Total Owed |
|---|---|---|---|
| 1 | £50,000 | £2,500 | £52,500 |
| 2 | £52,500 | £2,625 | £55,125 |
| 3 | £55,125 | £2,756 | £57,881 |
| 4 | £57,881 | £2,894 | £60,775 |
| 5 | £60,775 | £3,039 | £63,814 |
| 10 | £77,640 | £3,882 | £81,522 |
| 15 | £99,091 | £4,955 | £104,046 |
Based on an annually rolled uplifetime mortgage loan of £50,000 with a compound interest rate of 6%
| Year | Loan | Interest at 6% | Total Owed |
|---|---|---|---|
| 1 | £50,000 | £3,000 | £53,000 |
| 2 | £53,000 | £3,180 | £56,180 |
| 3 | £56,180 | £3,371 | £59,551 |
| 4 | £59,551 | £3,573 | £63,124 |
| 5 | £63,124 | £3,787 | £66,911 |
| 10 | £84,475 | £5,069 | £89,544 |
| 15 | £113,048 | £6,783 | £119,831 |
An Early Redemption Charge (ERC) is a fee charged by the lender if you redeem a lifetime mortgage earlier than anticipated. An ERC may apply ifyou decide to sell the property and repay the loan.
Fixed term ERCs
Most lenders have fixed ERCs, which are a percentage of the outstanding balance and the percentages usually reduce over time.
For example, you may be required to pay an additional 5% of the balance if you repay the loan between years 1-5, but this might reduce to 3%between years 6-8. After a set period the ERCs may no longer apply.
Gilt based ERCs
Some ERCs are conditional on the current gilt rate (these are British Government bonds). As these rates are variable, it is not possible to know how much the charge would be in advance. This type of ERC is less common.
Some lenders have specific special circumstances where they would not apply an ERC, such as in the event of downsizing.
Since November 2019, all lenders have to give 3 years protection to joint borrowers to protect them from ERCs when one of them dies or goes into care. This gives customers 3 years to make sure they want to carry on living in the home without their partner and gives them the opportunity to move somewhere else without financial penalty.
Some providers offer plans with cashback. This is an extra lump sum, on top of the loan amount, which you will not have to pay interest on.
The cashback is yours to use as you wish, however, it may be the perfect way to pay for the setup costs for your lifetime mortgage facility.
Some providers will offer a fixed amount, regardless of the amount that you are borrowing, but some providers will offer a percentage of the amount released. This could be somewhere between 2% and 5%.
If this is something that you are interested in then make sure you mention this in your initial enquiry with us as we will be able to recommend providers that offer cashback facilities.
Some lifetime mortgage products charge a sizeable product fee. Whether or not this is worth paying depends on how much you are borrowing.
If you are borrowing a sizable amount of money it may be worth paying a product fee to secure a better rate. However, if you are only borrowing a small amount then you might be better off not paying a fee and opting for the higher interest rate.
To find out whether it is worth paying a fee, you need to compare the total amount you will be paying over the lifetime of the loan if a different interest rate was applied. If the savings you would make by paying alower interest rate are more than the product fee, then it could make financial sense to pay the fee. It is important to review the quotes provided for any product to look at the breakdown in costs and how the outstanding balance changes over each year that the loan is in place.
Currently, interest rates start from 4.34% MER. If you borrow the maximum amount available to you, then you are likely to pay around 6.5% MER. However, borrowing just a little less can make a big difference to the rate, so our calculator will provide 3 quotes for different loan amounts, to illustrate how the amount you borrow can affect the interest rate.
The rates available to you will depend on how much you want to borrow compared with the value of your home. This is known as the loan to value ratio (LTV). The lowest LTVs qualify for the best rates so borrowing less money will mean that you can access better rates.
The amount you can borrow depends on the value of your property and your age (if it is going to be in joint names, then it will depend on the age of the youngest borrower). The older you are, the more you can borrow. Some products allow an extra 1% loan to value (LTV) with each additional birthday.
It is probably worth mentioning here that if you borrow the maximum amount available, you will likely be paying a higher interest rate. Sometimes borrowing a little less can have a very significant and favourable impact on the interest rate. To demonstrate this our equity release calculator will provide you with three quotes illustrating the different bandings and interest rates.
Interest is charged on a monthly basis, whichever type of equity release product you look at. The difference is that with pay monthly (serviced) products, you pay the monthly interest amount charged each month, just as you would pay an interest only mortgage. The amount of debt with these products remains the same throughout the term of mortgage, as you are repaying the interest charges.
Interest Roll Up means that you do not make any monthly payments, leaving the interest to be added to the mortgage facility each month. Interest is calculated on the new higher debt figure each month, so in effect you end up paying interest on interest (compound interest). This may suit a lot of people who want to maximise the amount of money they have to live on each month. The amount of debt will grow, but since we only use lenders who are members of the Equity Release Council, you can be assured that you will never leave the property in the situation of negative equity.
Written By Holly Andrews
Last updated: 06 September 2024 | © KIS Bridging Loans 2024