Why compound interest on Lifetime Mortgages in 2020 is not your enemy.
Ever heard of the Rule of 72?
Ten years ago, interest rates for Equity Release were as high as 9%. This meant that the amount you borrowed would double in 8 years. 72 ÷ 9= 8 years (the rule of 72).
A rate of around 3% is available for lifetime mortgages currently, so how long would it take this debt to double?
Using the rule of 72 again: 72 ÷ 3 = 24 years for your debt to double. What a difference!
Also, with many modern Lifetime Mortgages you are able to pay part or all of the interest to further slow or stop the debt increasing.