How can I reduce the cost of my lifetime mortgage?
All of Key’s plans come with options to help reduce the total cost of the borrowing if that’s important to you; for instance, if you wish to leave a larger inheritance. Making repayments Even though there are typically no monthly your total cost of borrowing would be £223,915*. repayments to make with a lifetime mortgage, all However, by making a monthly £250 repayment, our plans come with the option to make ad-hoc after 15 years, you’d owe £146,440 – with a total or regular repayments to help reduce your total cost of borrowing, including repayments, cost of borrowing. Even if you’re only able to make of £191,440. small repayments, it will help reduce the amount This means, by repaying £250 a month, you, of interest you pay over the lifetime of your loan. and your beneficiaries, could benefit from a In this example, if you were to borrow £81,703 £32,475 net interest saving. and make no repayments at all, after 15 years, How making repayments can help you manage your total cost of borrowing
Total cost of borrowing making no repayments would be £223,915
Total cost of borrowing repaying £250/month would be £191,440 Net interest saving of £32,475
— £142,212
Interest accrued
— £81,703 Initial loan — £64,737 — £45,000
Repayments made
Interest accrued
— £81,703 Initial loan
Initial release amount of £81,703**. Plan subject to a fixed interest rate of 6.74%** MER. Interest and repayments shown over a 15-year period. *Based on a fixed 6.74% MER (Monthly Equivalent Rate) interest rate. **Key Market Monitor Q1, 2023
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