Equity release and interest rates

Are you looking to renovate your home or help a loved one out with school or university fees?

Whatever your reason for wanting to boost your finances, The Equity Release Experts are here to help with equity release advice. Equity release could be a way to release some of the tax-free funds that are tied up in your home, without the hassle of having to move.

However, we know that it’s a big decision, so before you commit to anything, it’s vital that all your questions have been answered. If you want to know if equity release is the most suitable option for you or what interest rates are available on lifetime mortgages, allow us to help.

We pride ourselves on our reliable, transparent advice, and are always here to help you understand equity release and what it entails.

What are the interest rates with equity release?

When you have been carrying out your research, we’re sure you have questioned what interest rates are available. Naturally, the answer to this is completely dependent on which plan you decide on. Compound interest accrues on lifetime mortgages but no interest is charged on a home reversion plan.

Lifetime mortgage

If you are a homeowner aged 55 or over, you might wish to go for the most popular type of equity release, a lifetime mortgage, which is a loan secured against your home. This will allow you to release some of the money that is tied up in your property, while still retaining full ownership.

Some lifetime mortgages allow you to pay some or all of the interest every month, however with a lifetime mortgage there are typically no monthly repayments to make as the loan, plus roll up interest, is repaid when the plan comes to an end. The interest rates on most plans can also be fixed for life, your adviser will go through this in your appointment.

Home reversion

If you’re 65 or over, another way to release cash from your home is to sell all or a percentage of your property's value to a reversion company. In return, you’ll receive a tax-free lump sum.

The sum you receive will depend on your age, the value of the property and the percentage that you sell. It’s also important to note that you will receive less than the market value of your home. Whilst you will no longer be the legal owner of your home, you can choose to live in it rent free for as long as you wish.

With this type of equity release plan, there are no monthly repayments to make or interest accruing. At the end of the plan – when your house is sold – the reversion company will take their percentage of the proceeds and the remainder will be left to your estate, if you did not sell 100% of your property.

Speak to equity release specialists

You have to receive advice before releasing equity from your home. It’s vital that you explore the different equity release products available to decide which is the most suitable for you.

When you come to us, we will discuss important factors such as interest rates and how the interest will accrue, as well as set-up fees.

Phone The Equity Release Experts on 0800 188 4812 or ask us to call you back. We’re here to help Monday-Friday, 9am-5.30pm.

Alternatively, by using our free, no-obligation equity release calculator, you will be able to see how much money you could release from your home.


Things to consider with equity release

  • Equity release may involve a lifetime mortgage which is a loan secured against your home. 

  • With a lifetime mortgage there are typically no monthly repayments to make as the loan, plus roll up interest, is repaid when the plan comes to an end.

  • Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits.

  • With a home reversion plan you will sell all or part of your home to a reversion company for lower than market value.

  • Unless you decide to go ahead, our service is completely free of charge as our fixed advice fee of £1,799 is only payable on completion of a plan.