📈 Equity Release Interest Calculator UK
Calculate the impact of compound interest on equity release loans
How to Use the Equity Release Interest Calculator
- Property Value: Enter your current property's market value.
- Release Amount: Input how much you want to release.
- Interest Rate: Enter the rate quoted by your provider.
- Time Horizon: Estimate how long you'll keep the loan.
- Your Age: Enter the youngest applicant's age.
- Product Type: Select the type of equity release product.
- Property Growth: Set expected annual property appreciation.
- Options: Select any additional features or protections.
- Calculate: See the long-term impact on your property equity.
Frequently Asked Questions
With equity release, interest is added to your loan balance each year, and then interest is charged on the new higher balance. This compound effect means the debt grows exponentially over time.
This guarantee ensures you'll never owe more than your property is worth. If the debt exceeds the property value when sold, the lender absorbs the loss, protecting your estate.
Yes, many providers offer interest-only options where you pay monthly interest, keeping the loan balance fixed. This significantly reduces the long-term cost but requires ongoing monthly payments.
If property values fall while your debt grows, you could end up with little or no inheritance to leave. However, the no negative equity guarantee protects you from owing more than the property's worth.
Consider downsizing, personal loans, or family assistance first. Equity release should be a last resort due to its high long-term costs. Always seek independent financial advice.