Interest only equity release calculator
An interest only lifetime mortgage allows the regular repayment of the interest charged by the lender. In repaying the interest, your outstanding balance will remain level throughout, hence only the initial amount borrowed needs repaying when your plan ends.
There are two main ways where lifetime mortgages allow the interest element to be repaid. The choice to be made is whether you want discipline in making committed monthly payments, or the flexibility as to when and how much you want to pay: -
1. Interest Only Lifetime Mortgage - is where a committed regular monthly interest payment is arranged with the lender - usually paid by direct debit. A fixed lifetime interest rate means the balance will remain level throughout the duration of the plan.
2. Voluntary Payments – ad-hoc payments of between 10-15% of the original amount borrowed can be paid yearly without penalty. By knowing the interest rate and the proposed loan size, voluntary payment plans can therefore be used for interest only purposes.