Calculate The Best Interest Only Lifetime Mortgage Interest Rates

The range of interest only lifetime mortgage interest rates is set to grow further in 2025 due to the level of demand from homeowners seeking financial freedom to choose their own mortgage repayments.

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

Our interest only lifetime mortgage interest calculator tools provide our experts with the means to dive down into detailed reports.

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. 

We provide a complete lender research service, including:

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

What are the best interest only lifetime mortgage interest rates?

The options with interest only lifetime mortgage interest rates is growing each year, but what are the best rates from the range of interest only lifetime mortgages available?

Several lenders, including Standard Life, More to Life and Pure Retirement are now providing discounted interest rates for paying a percentage of the monthly interest. 

For example, paying 100% of the interest will result in the highest discount on the interest rate available. 

Options for paying 50% and 75% of the interest are also available to provide flexible and affordable options. 

Get in touch for a personalised quotation based on your preferred monthly interest payment figures, which will ultimately dictate the interest rate available. 

Later Life Finance are an FCA authorised mortgage broker for your peace of mind. We are also a member of the equity release council, of which lifetime mortgage plans have full protection from the councils codes of conduct. 

Crucially, you cannot default on the payments with an interest only lifetime mortgage, meaning if you cannot meet the monthly payments you have the option to ‘roll up’ the interest if desired. 

If you are wondering how much equity can I release from my home, our experts can guide you through your options. 

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  • Lifetime mortgages allow homeowners over 55 to borrow against your home with the option to make voluntary repayments to preserve more of your equity. (Payments are optional). 

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Summary

Our free equity release calculator provides instant results. In order to provide you with an accurate calculation your age and estimated property value are required. 

Any personal details provided are confidential and not shared with third parties. 

Our expert equity release advisers will provide detailed interest projections and illustrations for your consideration. 

Your adviser will check if an equity release product is suitable and explain how much equity you are eligible for and compare the market to ensure you secure the best solution. 

They will also explain how the lifetime mortgage interest may affect the remaining equity in your home and they should recommend you discuss your plans with any family members, if appropriate.

To find out how much equity you can borrow with a lifetime mortgage, request a call back for a detailed illustration. 

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.