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Free equity release guide
If you’re thinking about equity release, you’ll want to know what the interest rates look like today. Rates change over time, so it’s important to use up-to-date figures.
Explore the latest interest rates available with Key. These apply to lifetime mortgages only, a loan secured against your home. As home reversions don’t have interest rates.
See what our Honest | Personal | Trusted advice could mean for you.
What is the current interest rate on equity release?
There isn’t one set interest rate for equity release. Your lifetime mortgage rate depends on things like your age, your property, and the type of plan. Extra features, such as inheritance protection or early repayment options, can also change the rate. This means two similar people may still get different rates.
Here's what to expect with the latest rates available through Key.
Representative example
Rates correct from 9th February 2026. Based on customer data from the last 60 days, apart from Key's lowest rate. Interest rate received and plan features are subject to eligibility. Ask for a personal illustration.
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AER stands for Annual Equivalent Rate. It shows what the interest rate would be if the interest compounded each year.
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APR stands for Annual Percentage Rate. It's the cost you pay each year to borrow money, including fees, expressed as a percentage.
Our equity release UK calculator will give you an idea of how much you could release. Your equity release adviser can give more information on interest rates.
Calculate nowSome plans fix the rate for a set period instead. After that period, the rate may change under the plan’s terms. Product features and your choices affect how costs play out, including whether you make regular payments.
If you want to manage interest as you go, an interest-payment lifetime mortgage lets you pay some or all of the interest, which can help control the balance over time.
What are the factors that influence equity release interest rates?
Lifetime mortgage interest rates are shaped by four main factors: your age, your property, your plan features and the wider economy. Lenders look at these details together when setting the interest rate you’re offered. Below is a breakdown of how each factor plays a part.
How do interest rates affect your lifetime mortgage balance?
Compound interest is added to a lifetime mortgage. This means interest is added to your balance, and then interest is charged on the new total. The interest rate, along with the size of your loan and how long your outstanding plan runs, will affect how your balance grows over time.
Here’s an example using a 6.11% AER rate. It shows how interest can build if no payments are made over 15 years.
| Year | Balance | Interest | Total Owed |
|---|---|---|---|
| 1 | £70,000 | £4,277 | £74,277 |
| 2 | £74,277 | £4,538 | £78,815 |
| 3 | £78,815 | £4,816 | £83,631 |
| 10 | £119,373 | £7,293 | £126,666 |
| 15 | £160,578 | £9,811 | £170,389 |
Equity release reduces your estate’s value and may impact your entitlement to means-tested benefits. It may leave limited or no property equity and will reduce your future financial options.
Interest rates have a big impact on how your lifetime mortgage balance grows. Even small changes can make a difference over time, which is why it’s important to look at the rate before you choose a plan.
The rate will guide how your balance moves, whether you take a lump sum or set up a drawdown facility. But the interest rate you see upfront is only one part of the decision. Other costs such as product fees, advice fees or solicitor fees, early repayment options and safeguards such as inheritance protection can all shape the overall cost and how flexible the plan feels.
A plan with a slightly higher rate may suit your goals better if it offers features you value. A lower rate may look appealing but could come with fewer options.
Key can help you compare these details side by side. You can see how plans we recommend differ and check which features match your needs.
Already have a plan?
See if you could release more or switch plans with a better interest rate.
Discover your next steps with Key
Your details and product choice will change the rate. Your situation is unique, so speak with a qualified equity release adviser before you decide.
Lifetime mortgage interest rates can change when lenders update their pricing or when wider economic factors move. Interest rates aren’t updated on a set schedule, so it’s important to look at current, dated figures when comparing your options.
A “high” lifetime mortgage interest rate depends on the wider market and the type of plan you choose. As a guide, rates that sit noticeably above the latest Equity Release Council average (7.24% APR in Q2 2025) may be higher than what similar products offered at that time. Your own rate will depend on your details and the plans available when you apply.
Page last updated: Friday 19 December 2025