Interest Only Lifetime Mortgage Calculator
Use this interest only lifetime mortgage calculator to compare the two ways a lifetime mortgage can work: pay the interest each month so the balance stays the same, or let the interest roll up so the balance grows over time. Enter your home value, the loan amount, the interest rate and the number of years to project.
Calculator
How to use this calculator
- Enter your home value and the loan amount you are considering.
- Enter the interest rate and how many years you want to project.
- Click Calculate to see the monthly interest payment, the balance if you pay the interest, and the balance if the interest rolls up instead.
Worked example: a £100,000 loan at 6% costs £500 per month if the interest is paid. If the interest rolls up instead, the balance grows to about £179,085 after 10 years and about £239,656 after 15 years, before any change in the property value.
Frequently Asked Questions
What is an interest only lifetime mortgage?
It is a lifetime mortgage where you pay the interest each month, so the loan balance does not grow. The loan is usually repaid when you die or move into long-term care.
What happens if I stop paying the interest?
Unpaid interest is normally added to the loan, so the balance starts to grow through compounding. Some products let you pause payments, but the terms vary.
How does this differ from a roll-up lifetime mortgage?
With a roll-up product no monthly payment is made and all interest is added to the loan from the start, so the balance grows faster.
Is equity release right for me?
It reduces the inheritance you leave and can affect means-tested benefits. Independent financial advice is strongly recommended before taking one out.