Lifetime Mortgage Rates

Want to know how much interest you’ll pay on a lifetime mortgage? Here are the rates you can expect and where to find the best equity release deals.

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Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: March 15, 2024

If you’re looking into the possibility of using a lifetime mortgage to release equity from your home, you’re probably wondering what sort of interest rates you should expect to pay.

This guide covers everything you need to know about lifetime mortgage interest rates. We’ll explain how the rates are structured, where to compare the best deals, and why expert advice can help you secure the cheapest rates – no matter your circumstances.

What is the typical interest rate for a lifetime mortgage?

The rates table featured in the section below provides an indication of the interest rates available for a lifetime mortgage, based on a standard applicant in a typical property.

Before looking at that, it’s important to bear in mind that there are plenty of factors that could impact the rates you’re able to access.

Some key areas of importance that will determine the interest rate you’re offered for a lifetime mortgage include:

  • Your personal circumstances (such as your age and credit history).
  • How much you want to borrow and your loan-to-value (LTV) ratio.
  • If you want to receive a lump sum or take regular drawdown payments.
  • Do you want the ability to make additional interest payments when you can afford to?
  • The type of property you have (whether it’s a non-standard construction or has any distinctive features).
  • Selecting to have negative equity or inheritance protection.
  • Your current finances and the amount of equity you own in the property.
  • Whether you’re looking for a fixed-rate or variable tracker lifetime mortgage deal.

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Best Lifetime Mortgage rates available currently

The table below provides an illustration of some of the best interest rate deals currently available for lifetime mortgages.

Lender Product Details
Frosted Rates Image

Looking for more rates and deals?

We can match you with a mortgage broker who can provide you with up-to-date bespoke rates and deals from across the entire market.

Last updated May 2024

Please note that the above rates are purely for example purposes, were accurate at the time of writing, but are subject to change at the provider’s discretion. Speaking to a mortgage broker is the best way to find the most up-to-date deals.

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How a broker can help you get the best lifetime mortgage rates

When you’re looking to release equity using a lifetime mortgage product, securing the cheapest rates will make a notable contrast to the total amount you pay for the loan as the years roll on. The best way to make sure you’re on the lowest possible rate is with the help of an expert mortgage advisor.

There are specific mortgage brokers who focus on lifetime mortgages and have plenty of experience securing cheap interest rates for clients. These specialist mortgage advisors can do this because they have a deep knowledge of the market and also existing relationships with lifetime mortgage lenders, allowing them to access deals and rates not available to the public.

If you’d like to be introduced to an expert mortgage advisor who can help you lock in the lowest rates for your lifetime mortgage, just make an enquiry. We’ll introduce you to a skilled broker for free.

Rates for different types of lifetime mortgages

It’s also worth bearing in mind that the type of arrangement you’re using to release equity with a lifetime mortgage can impact the rates on offer. For example, whether you opt to set up one of the following ways of borrowing can lead to different lifetime mortgage rates when you’re comparing deals:

  • Fixed-rate or variable rate – interest rates can be higher with fixed (not always), but you get more stability compared to a tracker.
  • Interest-only lifetime mortgage or retirement interest-only (RIO) – allows you to pay off the interest as you go, which may incur higher rates because lenders make less money from these deals.
  • Drawdown or flexible – you may end up paying a higher interest rate with some lenders if you want more flexibility around how you take your money.
  • Enhanced – allows access to more money for those with medical conditions that could reduce their lifespan. But, there may be a higher rate used if the lifetime of the loan will be shorter.
  • Protected – guarantees a certain percentage will be left for an inheritance, but this can reduce the amount you borrow or come with higher interest.

Interest-only lifetime mortgage rates

One of the main alternatives to a fixed-rate lifetime mortgage is an interest-only option (sometimes marketed as a retirement interest-only RIO product). Instead of letting the interest roll up and accrue over the years, you can actually pay it off as you go. This can leave you owing a much smaller balance when you die or move into care.

The table below shows what the best interest rates are at the moment for these types of mortgages.

Lender Product Details
Frosted Rates Image

Looking for more rates and deals?

We can match you with a mortgage broker who can provide you with up-to-date bespoke rates and deals from across the entire market.

Last updated May 2024

The above rates are purely for example purposes and were accurate at the time of writing, but are subject to change at the provider’s discretion. Speaking to a mortgage broker is the best way to find the most up-to-date deals.

Get matched with a lifetime mortgage specialist

When you want to get yourself set up with a competitive lifetime mortgage, finding the best deals and cheapest interest rates can be tricky without guidance from an expert mortgage broker.

We offer a free, broker-matching service. This means we’ll quickly assess your equity release needs and then introduce you to an experienced lifetime mortgage broker.

Just call 0808 189 2301 or make an enquiry. We’ll set up a free, no obligation chat between you and a skilled broker who will find you the lowest lifetime mortgage rates available.

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Ask Us A Question

We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects.

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FAQs

This depends on the structure of your arrangement. Most lifetime mortgages will be set up on a fixed-rate basis, which means you don’t have to pay anything until you die or move into care.

Over the years, interest on your loan will accrue and compound. The longer you live, the higher your overall interest will be, and the sale of your property will be used to pay off your debt balance.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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