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An interest rate tells you how much it costs to borrow money. Future interest rates can be difficult to predict, as they’re impacted by a wide range of factors. However, most more2life lifetime mortgage interest rates are fixed for life, which means that they won’t change over the lifetime of your mortgage.
What impacts lifetime mortgage interest rates?
If you’ve been speaking with an equity release adviser about a lifetime mortgage, you may have noticed that residential mortgage rates (the interest rate you’d get from a high street bank for your mortgage) and lifetime mortgage rates don’t always move in the same direction. They don’t always increase or decrease at the same time, and often by different amounts.
That’s because they’re typically influenced by different things. Residential mortgage terms usually last between two to five years, whereas lifetime mortgages are designed to last a lot longer – so they’re priced in different ways.
As they’re intended to be longer term, lifetime mortgage rates aren’t tied to the Bank of England base
rate. That’s because the Bank of England base rate can change quickly. Instead, they’re typically based on
longer-term borrowing, such as the 15-year gilt rate (see overleaf).
So, when the Bank of England base rate increases or decreases, there’s no guarantee that lifetime mortgage
rates will follow.
What is the 15-year gilt?
The 15-year gilt rate is the interest rate the UK government pays to borrow money for 15 years. This rate is influenced by factors such as inflation, economic growth, and market demand. A rising gilt rate generally means
longer-term borrowing costs are increasing, while a falling rate indicatesthe opposite. It’s often used as a benchmark for long-term borrowing costs, including products such as lifetime mortgages.
When is the best time to take a lifetime mortgage?
Your adviser will be able to talk you through current lifetime mortgage rates and explain them to you in more detail. They’ll advise on your circumstances and tell you if they think a lifetime mortgage is suitable for you.
If you’re expecting a change in the future, or you want to plan for any unexpected eventualities, your adviser will be able to point you in the right direction. And if you decide that a lifetime mortgage is right for you, they’ll help you decide which plan offers the features and benefits that align with your needs.
Read now
What impacts lifetime mortgage interest rates?
If you’ve been speaking with an equity release adviser about a lifetime mortgage, you may have noticed that residential mortgage rates (the interest rate you’d get from a high street bank for your mortgage) and lifetime mortgage rates don’t always move in the same direction. They don’t always increase or decrease at the same time, and often by different amounts.
That’s because they’re typically influenced by different things. Residential mortgage terms usually last between two to five years, whereas lifetime mortgages are designed to last a lot longer – so they’re priced in different ways.
As they’re intended to be longer term, lifetime mortgage rates aren’t tied to the Bank of England base
rate. That’s because the Bank of England base rate can change quickly. Instead, they’re typically based on
longer-term borrowing, such as the 15-year gilt rate (see overleaf).
So, when the Bank of England base rate increases or decreases, there’s no guarantee that lifetime mortgage
rates will follow.
What is the 15-year gilt?
The 15-year gilt rate is the interest rate the UK government pays to borrow money for 15 years. This rate is influenced by factors such as inflation, economic growth, and market demand. A rising gilt rate generally means
longer-term borrowing costs are increasing, while a falling rate indicatesthe opposite. It’s often used as a benchmark for long-term borrowing costs, including products such as lifetime mortgages.
When is the best time to take a lifetime mortgage?
Your adviser will be able to talk you through current lifetime mortgage rates and explain them to you in more detail. They’ll advise on your circumstances and tell you if they think a lifetime mortgage is suitable for you.
If you’re expecting a change in the future, or you want to plan for any unexpected eventualities, your adviser will be able to point you in the right direction. And if you decide that a lifetime mortgage is right for you, they’ll help you decide which plan offers the features and benefits that align with your needs.
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