How an interest reward lifetime mortgage could work for you
CASE STUDY EXAMPLE Save thousands in interest charges Marge is a 71-year-old divorced retiree looking to release £100,000 from her £600,000 property to gift money to her grandchildren and help making some home and garden improvements.
By committing to paying 100% of the monthly interest for 10 years, Marge is rewarded with a 0.30% interest rate discount. Through this interest rate discount, and by paying monthly interest payments for 10 years, Marge can save more than £116,000 over 20 years compared to making no repayments through the same standard lifetime mortgage.
Interest Reward Lifetime Mortgage
Lifetime Mortgage
Initial loan amount
£100,000 6.5% MER*
£100,000 6.2% MER*
Interest rate
£532 (for 10 years) (100% of the monthly interest) £249,436 (inc. payments)
Monthly payments
£0
Total cost of borrowing after 20 years
£365,645
Net saving
£0
£116,209
*Monthly Equivalent Rate. Interest rates, monthly payments and savings amounts are for illustrative purposes only. Interest rate received and plan features are subject to eligibility. Ask your adviser for a personalised quote.
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