How is interest calculated on a lifetime mortgage?

Our Lifetime Mortgages have a fixed interest rate for life, which means it will not change for the duration of your loan. Interest is charged on a compounding basis, which means that interest is charged on the loan amount plus any interest already charged.

Interest on our Lifetime Mortgages is calculated daily and added to the amount you owe each month. This means that the amount you owe will quickly increase over time, reducing the equity left in your home, especially if the loan continues for a longer period. There may be cheaper ways to borrow money.

 

 

Examples of how compound interest works on our Lifetime Mortgages

The tables below show how much you might owe over a period the first five, after 10 years; after 15 years; and after 20 years with example compound interest rates of 3%, 4% and 5% on an initial loan of £50,000.

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