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.👏