What are the latest equity release interest rates?

Check the latest equity release interest rates, find out how lenders calculate these rates, and get up-to-date quotes at today’s best equity release rates.

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Your guide to equity release interest rates

It’s important to understand the interest rate offered by equity release providers if you are considering this form of later life lending. Rates have risen over the past year or two, so it is especially important that you know how to find the best rate when taking out an equity release plan.  

In our guide to equity release interest rates, we look at how interest rates work, the current rates available, and which factors will affect your own unique rate. We hope that this will help you when it comes to choosing a provider and plan, should you choose to investigate equity release further.

If you do wish to talk to a specialist equity release adviser to discuss your circumstances, check your eligibility, and discover the best rates available to you, please call us on 0800 096 2215 or request a call back. We can arrange a no-obligation appointment with one of our selected equity release advisers. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

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Why is the equity release rate so important?

With a lifetime mortgage – the most popular form of equity release – you borrow money in the form of a loan secured against your property. You don’t have to make any monthly repayments, unless you choose to do so. Instead, the loan is typically paid back via the sale of your house when you pass away or move into long-term residential care.

As with just about every other type of lending, lenders of course add interest to the loan. This is on a ‘compound interest’ basis, where interest accrues on the original loan amount plus any previously accrued interest. This is also known as roll-up interest.

The interest rate on equity release offered to you is therefore important as it will determine the total cost of the loan. The higher the interest, the less money will likely be left to leave to your loved ones after the sale of your property.

The latest Lump Sum lifetime mortgage equity release rates

Let’s look in more detail at some of the best equity release rates available for lump sum lifetime mortgages, where you take a single one-off release of tax-free cash.

With a lump sum lifetime mortgage, the interest rate is typically fixed for your plan, regardless of whether interest rates change in the future.

Best equity release rates – lump sum lifetime mortgages

PositionProviderProductRate (MER)
1Standard LIfeHorizon 240 Lump Sum6.03%
2JustJust For You - J1 Green6.10%
3Standard LifeHorizon 240 Lump Sum Fee Free6.10%
4JustJust For You - J2 Green6.15%
5JustJust For You - J16.20%
6Pure RetirementClassic Elite Lump Sum Super Lite 26.21%
7Pure RetirementClassic Lump Sum Super Lite 26.23%
8LV=Lumpsum Lifestyle LS16.25%
9JustJust For You - J26.25%
10More2LifeCapital Choice Ultra Lite Lump Sum 16.25%

Please note: Information from Equity Release Supermarket, 24/11/23. Rates change daily and the best rate available to you may differ from the ones shown above – so please contact us for quotes showing the best interest rates currently available to you. ‘MER’ is ‘monthly equivalent rate’.

The latest Drawdown lifetime mortgage equity release rates

Now let’s look at some of the best equity release rates available for drawdown lifetime mortgages where you take an initial lump sum, followed by further cash releases over time.

With a drawdown lifetime mortgage, the interest rate on the initial lump sum won’t change. However, interest rates in future releases are based on the rate applicable when you make each withdrawal. This could be higher or lower than the interest charged on your initial lump sum payment. Your lender will inform you of the interest rate each time you apply for a withdrawal.

Best equity release rates – drawdown lifetime mortgages

PositionProviderProductRate (MER)
1Standard LifeHorizon 240 Drawdown6.03%
2JustJust For You - J1 Green6.10%
3Standard LifeHorizon 240 Drawdown Fee Free6.10%
4AvivaEnhanced Lifestyle Flexible Option6.13%
5JustJust For You - J2 Green6.15%
6Legal & GeneralPremier Flexible Pearl6.17%
7Legal & GeneralPremier Optional Payment Pearl6.17%
8JustJust For You - J16.20%
9Pure RetirementClassic Elite Drawdown Super Lite 26.21%
10Legal & GeneralPremier Flexible Pearl6.22%

Please note: Information from Equity Release Supermarket, 24/11/23. Rates change daily and the best rate available to you may differ from the ones shown above – so please contact us for quotes showing the best interest rates currently available to you. ‘MER’ is ‘monthly equivalent rate’.

Interest rates

What influences underlying rates for equity release?

Equity release providers are like other lenders in that they link their interest rates to what’s happening in the economy. In particular, equity release interest rates are linked to rises and falls in the price of government bonds and the return on them (known as gilt yields). 

But this isn’t the only thing that can influence a lender’s underlying equity release interest rate. For example, they will also factor in potential future changes in gilt rates, and possible changes in property values.

How have typical equity release rates changed?

As you might expect given the huge changes in the economy in recent times, equity release rates have changed significantly over the past year or two. 

For example, the Equity Release Council in its Autumn 2022 Market Report said: “Average product rates rose from 4.10% in January to 5.74% in August.”

Also, Moneyfacts reported that the average equity release rate had increased from 4.17% in October 2021 to 7.54% by October 2022.

It’s interesting also to look at how rates have changed over the past 20 years or so. According to data from Key reported by This is Money, here’s how average interest rates on new equity release plans taken out in the first quarter of each year changed from 2003-2021:

Historical Equity Release Interest Rates

The good news for people borrowing money through equity release is that they have protection from future rate changes. A release with a lump sum lifetime mortgage is typically at a fixed rate, so the interest rate on a plan wouldn’t increase if interest rates rise. However, this does of course mean that the borrower wouldn’t benefit from any fall in the interest rate either.

Does everyone get the same equity release interest rate?

It’s important to know that not everyone gets the same rate. In fact, the best rates for equity release that you are offered may be below the average current equity release interest rates. This could save you potentially many thousands of pounds in interest over the life of your plan.

The Equity Release Council Autumn 2022 Report showed rates changing from 4.10% to 5.74% from January to August, but stated that the average equity release customer in the first half of the year: “Secured a significantly lower rate of 3.71%.” 

This is because as well as looking at gilt rates and other factors to set their underlying equity release interest rates, lenders take into account each applicant’s circumstances when offering them a rate: 

Loan to value (LTV) 

Loan to value refers to the relationship between the amount you wish to borrow and the value of your property. Maximum LTV will be the maximum percentage of your property value that providers are willing to lend you. In general, the closer to this maximum you release, the higher the interest rate your lender will offer.

Your property

Equity release providers may not charge their best equity release interest rates on certain properties. They take account of factors such as a property’s location, condition and whether they anticipate it is especially likely to significantly increase in value. Sometimes, they will charge a higher rate to reflect the risk they are taking on by lending against a property that falls below their ideal criteria. 

Your health and lifestyle

Having a past or current medical condition, or making lifestyle choices such as smoking doesn’t usually benefit you. But when it comes to equity release, you might qualify for an enhanced lifetime mortgage that secures you a better equity release interest rate, or lets you unlock more money from your home.

The product features you choose  

There are hundreds of different equity release products on the market, which means there is great variety in the mix of product features available. These features include:

  • Inheritance protection – a guarantee that your beneficiaries will one day be able to inherit at least some of the value of your home, regardless of how much interest accrues.
  • A drawdown reserve facility – setting aside some of the cash you can release to access later on rather than as part of your initial release. 
  • Being able to repay some of the loan without penalty – some lenders let you pay off more of the loan than others before you incur charges.

Sometimes you will find that the best interest rates on equity release plans with features like these are higher than on plans with fewer features. Think carefully about which features you want, and whether the higher interest rate is worth it.

Providers’ lending criteria

You may find that one provider is unable to offer you equity release if you don’t meet their lending criteria, whereas another provider may accept you. However, the lender that accepts you may not offer the lowest equity release rates.

Product fees

Some providers may appear to offer the cheapest equity release rate, but at the same time charge higher fees than others. They may even have fees that other providers don’t charge, such as a completion fee. Make sure you take fees into account when you compare equity release interest rates.

What’s the best equity release rate I can get?

Because lenders calculate interest rates for equity release on a case-by-case basis, you may be able to get a rate that’s better than the market average. Your personal circumstances will have a substantial impact on the rate your lender offers – and each lender will potentially offer a different rate.

We recommend talking to a specialist equity release adviser to discuss your circumstances, check your eligibility, and discover the best rates for equity release available to you. Call our team on 0800 096 2215 or request a call back and we can arrange an appointment with one of our selected equity release advisers.

Will my lender offer a fixed or variable equity release interest rate?

Lenders offer most lump sum lifetime mortgages on a fixed rate basis. This means that no matter what happens to equity release interest rates in the future, your interest rate won’t change. Variable rate lifetime mortgages are less common, although may be available to you.  

With a drawdown lifetime mortgage – where you take an initial lump sum typically at a fixed rate, followed by further releases as and when you need them – things are slightly different. With these plans, lenders calculate a new fixed rate for each additional withdrawal you make. Your lender will let you know the interest rate each time you apply for a withdrawal.

mature happy couple

Can I switch plans later on to get a better rate?

It’s important to understand and accept the interest rate your lender offers before going ahead with your plan. However, should rates fall significantly in the future, you may be able to switch to another equity release plan to take advantage of lower rates. 

Switching equity release plans will typically be an option after you’ve had your plan for one year. It could get you a better deal if the best interest rates for equity release come down, or if your circumstances change such that a provider will offer you a better rate. For example, if you develop a health condition that qualifies you for enhanced equity release terms. You may also be able to release additional tax-free cash during your switch.

But switching to a new plan will incur costs such as the new lender’s fees, legal/solicitor fees and an advice fee. There may also be an early repayment fee payable to your existing lender. You would therefore need to weigh up the benefits of switching against the fees involved.

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How is my interest paid back?

A lifetime mortgage is a secured loan where the loan and interest owed is typically repaid only when you pass away or go into long-term care. The interest ‘rolls up’ on a compound basis, i.e. the interest adds to the loan amount each month.

You can however take out an interest-only lifetime mortgage where you agree to make interest payments each month. If you choose to pay the full interest, and you keep up with the payments, no interest needs to be repaid when the house is sold at the end of the plan.

Another option is to make partial interest payments to pay some of the interest as and when you can afford to. This will reduce the amount of interest that needs to be paid when the plan ends. 

You can stop making the voluntary interest payments at any time. From that point on, the interest would roll up and add to the loan amount, just as with a regular lifetime mortgage.

Does anything other than the equity release rate influence how much my plan will cost?

There will be charges when taking out an equity release plan. Providers may charge some or all of these fees:

  • Valuation fees
  • Arrangement fees
  • Completion fees

However, providers don’t all have the same charging structure. It’s important to compare equity release interest rates AND other costs when considering which plan to choose.

Other fees when taking out an equity release plan include solicitor and adviser fees. You can typically pay some of these fees from the money you borrow, so you may not have to worry about finding them from your existing savings.

Once you’ve taken out a plan, there aren’t usually any further fees. One exception is an early repayment charge that some lenders request if you pay off some or all of your lifetime mortgage early.

What are the best equity release rates you can get?

As we have explained above, lenders will personalise your best equity release rate to your unique circumstances. By talking to one of our carefully selected advisers, you can check your eligibility and get quotes from leading UK equity release providers. 

To find out how much you could borrow, check here or talk to one of our friendly consultants by calling 0800 096 2215 or request a call back. Our initial consultation and appointment with an adviser are free and without obligation, and you are under no obligation to accept any of the quotes you receive*.

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Answering your questions

Still unsure of a few things? We’ve got you covered with answers to some of our most frequently asked questions.

  • How long does it take to release equity from a house?

      Completion of an equity release plan is typically 6–8 weeks after you submit your application with your adviser. Each application is different of course, and sometimes things do go ahead much sooner or take longer. For example, applications that are more complicated may take longer, due to factors such as property valuation issues or leaseholders being involved. 

      If it’s especially important that your application completes as soon as possible, please mention this to our selected advisers and they will do everything possible to help.

  • Can I pay off equity release early?

      For most people, an important reason for taking out a lifetime mortgage is that they won’t have to repay the loan until the home is sold when they pass away or move into long-term care. However, equity release providers recognise that people’s circumstances may change, and that you may choose or need to pay back the loan earlier.

      Early repayment charges will often apply, and these will be explained to you when you receive advice on lifetime mortgages. However, charges are often waived in certain circumstances and our selected advisers can explain the relevant terms and conditions of each lifetime mortgage product they present to you.

  • What are the initial costs of equity release?

      Just as with a normal residential mortgage, you should be aware of costs involved in setting up an equity release plan. Your adviser will make sure you understand these in full before you decide whether to take out a plan, but below is a summary.

      Your lender will typically charge valuation, arrangement and completion fees, with further fees payable to the solicitor who acts for you. Some of these fees can be paid from the money you borrow, so you may not have to worry about finding them from your existing savings.

      Our selected advisers naturally charge an advice fee – but remember that any initial advice or information you receive from them is completely free and without obligation. You only pay them a fee if you apply AND your case completes.

      Once a plan is taken out, there aren’t normally any fees. One exception is an early repayment charge that some lenders request if some or all of a lifetime mortgage is paid off before you pass away or move into long-term care.

  • What are the potential risks and disadvantages of equity release?

      As with any financial decision, there are of course pros and cons of equity release. Although it has helped thousands of people to access tax-free cash in or close to retirement, it’s important to fully understand the advantages and disadvantages of equity release before deciding if it’s right for you; Here are some potential risks you need to be aware of:

      • Lifetime mortgage rates are calculated daily and the interest is added to the amount you owe each month. The amount owed therefore increases and reduces any equity left in your home when the plan ends, unless you choose to make interest payments while the plan is running.
      • Taking equity out of your home will mean that the inheritance you leave to loved ones will reduce. Each time you take money from the plan, the level of possible inheritance will fall. 
      • If you give some of the money you release to family as a gift, they may be liable to pay inheritance tax in the future.
      • You may have to pay an early repayment charge if you choose to pay back some of the loan early.
      • Borrowing money and building up your savings through a lifetime mortgage may affect your entitlement to some means-tested state benefits. During your appointment with one of our selected equity release advisers, they will help you establish whether your benefits could be affected.

      Equity Release Wise can connect you with a highly trained and knowledgeable adviser who will take the time to explain everything to you, so you can be absolutely sure about your decision.

Still have questions?

We hope this information has been useful. To find out more or arrange a consultation with an adviser, please call or request a call back and we’ll be happy to help further.

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+ Client testimonials refer to the service provided by our selected equity release advisers. We have changed the clients’ names and certain identifying information to protect their privacy.

Please note that equity release will involve a home reversion or a lifetime mortgage, which is secured against your property and will reduce the value of your estate and impact funding long-term care. To fully understand the features and risks, ask for a personalised illustration. Equity release requires paying off any existing mortgage. Any money released, plus accrued interest would be repaid upon death, or moving into long term care.