Interest Only Lifetime Mortgage Calculator

Access the growing range of interest-only lifetime mortgages and obtain interest calculations, projections and quotations for greater financial freedom.

Compare Lifetime Mortgages With Our Experts!

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Author- Paul Murphy 

Later Life Finance Limited. 

A married couple discussing an interest only lifetime mortgage calculator with their adviser

Interest only lifetime mortgage calculator

Get your free lifetime mortgage calculation...

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If you are seeking greater financial freedom from your mortgage lender, our interest only lifetime mortgage interest calculator tools provide our experts the means to dive down into detailed reports and calculations. 

We can show you the benefits of making regular interest payments to your lifetime mortgage, and how this will affect your estate. 

Later Life Finance are experts in flexible lifetime mortgages, which include the increasing range of interest only lifetime mortgages, which we compare as part of our advice service to secure you the best possible deal. 

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Repaying your mortgage to enjoy the retirement you've worked for

Voluntary repayment lifetime mortgage calculator

We provide a complete lender research service, including a voluntary repayment lifetime mortgage calculator 

  • Interest only lifetime mortgage payment projections
  • Detailed analysis of regular, ad hoc and voluntary payments
  • Graphs showing how interest payments effect your remaining equity and the impact on inheritance tax

Which is the best Interest only equity release calculator?

Our lifetime mortgage calculator is free and provides instant results. As experts in Later Life Mortgages and equity release, later life finance are well positioned to answer this and all your other questions. 

Understanding how your preferred mortgage repayments can impact on the interest costs will help you decide whether a lifetime mortgage is suitable for your requirements. 

You may be wondering if lifetime mortgages are a good idea and if they are suitable for your needs. 

To compare the top 10 equity release companies, we have reviewed and listed the best lifetime mortgage providers to help you compare your options, including lender features, such as downsizing protection, voluntary repayments and more. 

Interest only lifetime mortgage calculator

Can you release equity on an interest-only mortgage?

Yes, you can release equity on an interest only mortgage. As a specialist broker, Later Life Finance will review the whole lifetime mortgage market to source you the best deal.

Equity Release to Pay Off Interest-Only Mortgages Overview:

  • Eligibility: Typically available for homeowners aged 55+
  • How it Works:
    Release tax-free equity from your home.
    Use funds to repay your interest-only mortgage.
    Continue living in your home.
  • Types of Equity Release:
    Lifetime Mortgage:
  • Retain ownership & preserve equity with interest payments.

Can you release equity on an interest-only mortgage?

Yes, you can release equity on an interest only mortgage. As a specialist broker, Later Life Finance will review the whole lifetime mortgage market to source you the best deal.

Equity Release to Pay Off Interest-Only Mortgages Overview:

  • Eligibility: Typically available for homeowners aged 55+
  • How it Works:
    Release tax-free equity from your home.
    Use funds to repay your interest-only mortgage.
    Continue living in your home.
  • Types of Equity Release:
    Lifetime Mortgage:
  • Retain ownership & preserve equity with interest payments.

Get your free lifetime mortgage calculation...

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Interest Only Lifetime Mortgage FAQs

How is interest calculated on a lifetime mortgage? Interest Only Lifetime Mortgages have a fixed interest rate for life, which means it will not change for the duration of your loan if you maintain the interest payments.
Interest on a lifetime mortgage is calculated using a lifetime fixed interest rate. The Monthly Equivalent Rate provides the most accurate measurement, whilst the Annual Equivalent Rate provides the yearly calculation. An interest-only lifetime mortgage avoids compound interest accruing with regular repayments to maintain the balance.
During 2025 the average lifetime mortgage interest rate is expected to be around 5.5% to 6.5%, depending on whether regular repayments are made, and the loan to value percentage of borrowing.
Lifetime Interest on a mortgage is calculated using a lifetime fixed interest rate. The Monthly Equivalent Rate provides the most accurate measurement, whilst the Annual Equivalent Rate provides the yearly calculation. Lenders provide a projection of interest over an estimated life expectancy to show the interest costs.
In the event of you passing away shortly after obtaining a lifetime mortgage, the interest accrued would not have significantly accumulated, resulting in a smaller growth of the debt. If no other homeowner is listed on the lifetime mortgage, the lender requires the mortgage to be settled within 12 months of you passing away. The executors of your will sell the property and utilise the proceeds to settle the debt. The beneficiaries of your estate may opt pay off the debt using cash or a new mortgage and retain ownership of the property. This will depend on factors including your wishes set out in your will, and on whether the property is to be retained or sold, with any remaining equity divided by your beneficiaries. 
Equity release lenders who are a member of the Equity Release Council provide a no-negative equity guarantee. This ensures you will never be required to repay more than the proceeds from the sale of your home to settle the debt. In other words, the lender cannot pursue you for any shortfall between the debt amount and the sale proceeds. This protection is made possible by the no negative equity guarantee, which is upheld by all members of the Equity Release Council. According to this guarantee, the lender is strictly limited to requesting only 100% of the sale proceeds as repayment. They are not permitted to seek additional payment from you, your estate, or your estate beneficiaries.
A typical rate for a lifetime mortgage typically falls between 5.5% and 7%. That said, your rate may be different depending on factors like your loan-to-value ratio and the features included in your plan. It’s important to compare the features of different plans to find the one that best fits your needs.
Yes, mortgages are available for over 70s. Retirement and interest only lifetime mortgages provide the over 70s with a range of flexible mortgage solutions for remortgages and raising tax free wealth from their home.
Lifetime mortgage interest rates are typically based on your age, the amount of money you need to borrow, and the value of your property. Generally speaking, the older you are and the less you borrow, the lower the rate you can expect. Drawdown lifetime mortgages have interest rates set at the time of further borrowing, whereas the initial lump sum is determined at the time of arranging the plan. So be sure to research what’s out there before making a decision.
Yes, you can pay off a lifetime mortgage early, but there may be fees associated with doing so. Providers have varying levels of early repayment charges which your equity release adviser will discuss with you to ensure you have access to all your options and understand the features and charges. It is best to check with your provider before you decide on the repayment plan.
Lifetime mortgages come in several forms, including lump sum, drawdown and interest-only plans. Each offers different rates and repayment arrangements, so your adviser can tailor the mortgage to meet your needs. Later Life Finance provides access to the whole lifetime mortgage market. We will explain the features, costs and points to consider of each option. This will help you make a balanced decision on the right solution for you.
You can repay an interest-only mortgage with an equity release plan. Lifetime mortgages are the most popular form of equity release and allow optional repayments of interest charges, if you wish. Since monthly repayments are voluntary with a lifetime mortgage, your home is not at risk of repossession if you do not maintain monthly payments.Therefore these plans can be more suitable into retirement years.
An interest-only lifetime mortgage is a type of equity release plan where you can pay the interest off on a monthly basis. This avoids compound interest being added which stops the loan from increasing. This type of mortgage is popular for homeowners who want to maintain equity in the home for inheritance or downsizing purposes.
An interest-only lifetime mortgage is a way to release equity from your home to spend as you wish, whilst also paying interest monthly to avoid compound interest being added.

Next steps: Contact Later Life Finance for calculations and quotes

 

  1. Tailored Recommendations: Our expert advisers will assess your individual circumstances, financial goals, and risk tolerance, and, if suitable, recommend the most suitable lifetime mortgage plan. This will involve comparing different product features, interest rates, and lenders from the whole market to find the best fit for your needs.

  2. Expert Guidance: Our advisers have in-depth industry knowledge of the lifetime mortgage market to ensure you source the best solution for your specific needs. We will explain the pros and cons clearly and answer all your questions, to ensure absolute clarity prior to proceeding with an application. 

  3. Identifying Suitable Products: Navigating the equity release market can be complex. Our experts will identify products that meet your specific requirements and eligibility criteria, saving you time and effort in your research.

  4. Assessing Your Financial Situation: A comprehensive assessment will help identify potential risks and challenges associated with equity release. This allows you to make informed decisions about whether it’s the right choice for you, and how to mitigate potential risks.

  5. Application process: Our expert advisers manage the entire application process, including negotiating with lenders, gathering necessary documentation, and ensuring a smooth and efficient process.

  6. Ongoing Support: Later Life Finance provide ongoing support and guidance even after the equity release plan is in place. This can be valuable for addressing any questions or concerns that may arise in the future. For example, if you decide to move home in the future or your circumstances change, we will assist with any further questions or support as needed.