What interest rates do lifetime mortgages charge?

Lifetime mortgage interest rates typically range from 4.5% to 7% AER (2026). Rates are fixed for life, which provides certainty but means no benefit if rates fall. Because interest compounds, the balance can grow significantly over many years, this calculator shows you the projected balance at 5, 10, 15, and 20 years.

Do I have to make monthly payments on a lifetime mortgage?

No, with a roll-up lifetime mortgage you make no monthly payments. Interest compounds and the full balance is repaid when the property is sold. Some lenders also offer interest-only lifetime mortgages where you pay the monthly interest, keeping the loan balance static. This calculator covers both modes.

What is a no-negative-equity guarantee?

A no-negative-equity guarantee means you can never owe more than your home is worth, regardless of how long you live or how much interest compounds. It is a requirement for all Equity Release Council member products. Always check your product has this guarantee before proceeding.

What happens to a lifetime mortgage when I die or go into care?

On death or permanent move into long-term care, the property is sold and the proceeds repay the outstanding loan plus accrued interest. Any remaining equity passes to your estate. Beneficiaries typically have 12 months to repay, usually by selling the property.

Can I repay a lifetime mortgage early?

Yes, but early repayment charges (ERCs) typically apply in the first 8–15 years and can be substantial (up to 25% of the loan in some cases). Some products offer downsizing protection, allowing repayment penalty-free if you sell to move to a smaller home after 5 years. Always check your product terms.

Updated 6 April 2026

Lifetime Mortgage Calculator · Free UK 2026

See how interest rolls up over 5, 10, 15, and 20 years, or calculate monthly interest-only payments. No personal details required.

✓ Free to use✓ Roll-up & interest-only✓ 5–20 year projections✓ Instant results

Lifetime Mortgage Calculator

Enter loan amount and rate, see roll-up balance or interest-only payment instantly

Loan amount (£)

Annual interest rate (%)

Balance after 10 years

£170,814.45

Starting from £100,000.00 at 5.5% AER, no monthly payments

Original loan

£100,000.00

Balance after 5 years

£130,696.00

Balance after 10 years

£170,814.45

Balance after 15 years

£223,247.65

Balance after 20 years

£291,775.75

Projections are illustrative only, not financial advice. Rates and terms vary by lender. Seek independent FCA-regulated advice before taking a lifetime mortgage.

How Lifetime Mortgages Work

Quick Answer: A lifetime mortgage is a loan secured against your home with no mandatory monthly repayments. Interest compounds and the balance is repaid when you die or move into long-term care. At 5.5% AER, a £100,000 loan grows to approximately £170,800 after 10 years.

Roll-Up vs Interest-Only

With a roll-up lifetime mortgage, interest compounds annually, you pay nothing during your lifetime and the full balance is cleared from the sale of your home. With an interest-only lifetime mortgage, you pay the monthly interest to keep the balance static, leaving more equity for your estate.

Formula

Roll-up balance = Loan × (1 + rate)^years | Interest-only payment = Loan × rate ÷ 12

e.g. £100,000 × (1.055)^10 = £170,814 | £100,000 × 5.5% ÷ 12 = £458/month

Worked Example, £100,000 loan at 5.5% AER

Loan amount£100,000

Interest rate5.5% AER

Balance after 5 years (roll-up)£131,209

Balance after 10 years (roll-up)£170,814

Balance after 15 years (roll-up)£222,500

Interest-only monthly payment£458/month

Roll-up interest compounds annually. Interest-only keeps the balance at £100,000 but requires monthly payments.

Frequently Asked Questions

The amount depends on your age and property value, typically 20% to 55% LTV (loan-to-value). A 65-year-old might borrow up to 35–40% of their property's value. Some lenders also offer enhanced terms if you have certain health conditions. Use our equity release calculator for a quick LTV estimate.