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Lifetime mortgage interest rates

Examples of how compound interest rates work on a Legal & General Lifetime Mortgage.

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 added.

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.

How much could you release?

Find out how much money you could release from your home with our quick and easy to use lifetime mortgage calculator.

Examples of how compound interest works on our Lifetime Mortgages

The tables below show how much you might owe over the first five, after 10 years; after 15 years; and after 20 years with example compound interest rates of 6%, 7% and 8% on an initial loan of £50,000.

Year Loan amount 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 £84,474 £5,068 (£39,542) £89,542
15 £113,045 £6,783 (£69,828) £119,828
20 £151,280 £9,077 (£110,357) £160,357

The figures shown in brackets is the total amount of interest which will be added onto the original loan.

The rate you will get will be based on your individual circumstances.

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Not sure which option is right for you?

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Find out more about lifetime mortgages

Our Lifetime Mortgage products

Find out more about our Lifetime Mortgage products we can offer and whether or not it's right for you.

How equity release works

If you have further questions on how to release equity from your home, then we've got additional information which could help.

Lifetime mortgage advice service

Interested in lifetime mortgages but not sure where to start? Speak to one of our specialists for expert advice.