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Equity Release

Learn More About Equity Release Options

Equity Release mortgages are not like residential mortgages. They help you secure a loan against the value of your property. In these guides we outline what makes them different, the eligibility criteria and help you decide if it’s an avenue you would like to pursue. It’s a way to free up money in your later years, but with many factors influencing the loan, it’s good to learn as much as you can from qualified mortgage professionals.

Posted On: January 26, 2022
Updated On: January 16, 2023

What Is The Interest Rate For Equity Release?

As equity release mortgage brokers, we get asked a lot of questions about interest rates.

Interest rates for equity release tend to be higher than for a regular mortgage. But the advantage is that your interest rate will be fixed for life, so you won’t need to worry about price fluctuations.

However, one thing that you will need to keep half an eye on is the compounding interest.

What is compounding interest?

With a Lifetime Mortgage*, you will owe the money borrowed and the loan interest accrued. Over time, as you withdraw more of your loan and your interest grows, the interest can compound. This means that the interest rate applies to a larger sum – you’re essentially paying interest on your interest.

It can be worth paying off the interest as you go to prevent it mounting up too high. Even if your interest does clock up to a fair amount, by choosing a ‘no negative equity’ plan, you won’t have to pay back a penny more than the value of your property.

What are the equity release interest rates like right now?

Speaking to a mortgage advisor can really help as they will know how interest rates have changed and make suitable predictions. By combining your current financial and lifestyle circumstances with the interest rates, they will be able to advise on the best time to acquire an equity release mortgage and whether it’s the right course of action for you.

Speak to Agentis about equity release today

Our friendly, professional team of mortgage advisors are on hand to help you find the right equity release plan. We can answer all your queries and talk you through the interest rates so you know exactly what you’d be expected to pay. Contact us today.

*A lifetime mortgage is a long term commitment which could accumulate interest and is secured against your home. Equity release is not right for everyone and may reduce the value of your estate.