What is compound interest on equity release?
When you take out a lifetime mortgage, each month or year the lender adds interest to both the loan and interest already owed. This can build up significantly via compound interest, so it is important that you understand how it works.
You will need to consider the effect of compound interest when deciding whether equity release is right for you. In this article, we explain how compound interest on equity release works. We have also included a link to our equity release interest calculator.
Here is what we cover in this article:
- Compound interest on equity release: how does it work?
- How do equity release lenders set their interest rates?
- How can compound interest affect you?
- How can I reduce the amount of equity release compound interest?
- Get your personalised equity release quote.
We hope this article will help you understand equity release and compound interest, but more help is available through Equity Release Wise. Our selected advisers can provide information and advice, and competitive quotes from leading UK providers.
Just call us on 0800 096 2215 or request a call back and we’ll arrange a no-obligation appointment with an adviser for you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.