Equity Release Compound Interest Calculator
Project roll-up interest on a lifetime mortgage and the equity left for your estate
Last updated: June 2026
Equity Release Roll-Up Calculator
See how compound (roll-up) interest grows a lifetime mortgage and how much equity is left for your estate.
What this equity release compound interest calculator does
A lifetime mortgage – the most common form of equity release – lets homeowners aged 55+ unlock tax-free cash from their home without moving. With the standard roll-up option you make no monthly payments, so the interest is added to the balance each year and then itself earns interest. That is compound interest, and it can grow the debt surprisingly fast.
This calculator projects, year by year, exactly how much you would owe on a roll-up lifetime mortgage, how much of that is interest, and how much equity would be left in your home for you or your beneficiaries. It is built for over-55s weighing up equity release, families thinking about inheritance, and advisers who want a quick illustration. Enter the amount you want to release, a fixed interest rate (UK rates in 2026 typically sit around 6.2%–7.5% AER), and your time horizon. You can also model paying the interest in full, or making penalty-free partial repayments (most modern plans allow up to 10% of the loan a year) to slow the compounding right down.
How it works
The calculator applies your fixed rate to the outstanding balance each period, then carries the new total forward:
- Full roll-up:
balance × (1 + rate)each year – no payments, fastest growth. - Monthly compounding: the annual growth becomes
(1 + rate/12)12, which is slightly higher than annual compounding for the same headline rate. - Pay interest in full: the balance stays level at the amount you borrowed, so you owe only the original sum at the end.
- Partial repayment: interest is added, then your chosen yearly repayment is deducted, steadily shrinking the debt.
If you enter a property value and a growth rate, it also projects the future value of your home using value × (1 + growth)years and shows the debt as a percentage of that value plus the remaining equity. Thanks to the Equity Release Council’s no-negative-equity guarantee, you can never owe more than your home is worth, so remaining equity is floored at zero.
Worked example
Release £50,000 at a fixed 6.5% AER, compounded annually, on full roll-up over 15 years, with a £300,000 home growing 2% a year:
- Total owed after 15 years: £128,592
- Of which interest: £78,592
- At 6.5% the debt roughly doubles every 11 years
- Projected property value: £403,761
- Debt as a share of the home: 31.8%
- Remaining equity / inheritance: £275,168
Switch to “pay interest in full” and you would still owe only the original £50,000 after 15 years, leaving roughly £353,761 of equity – the cost of the convenience of roll-up is the £78,592 of compounded interest.
Frequently asked questions
How fast does equity release interest roll up?
With roll-up interest the debt compounds, so it grows faster every year. A useful rule of thumb: divide 72 by the interest rate to estimate the doubling time. At 6.5% the balance roughly doubles every 11 years, so £50,000 becomes about £100,000 in 11 years and around £129,000 in 15.
Can I make repayments to reduce the compounding?
Yes. Under Equity Release Council standards, all new plans that meet the standards give you the right to make penalty-free payments, subject to lending criteria – commonly up to 10% of the amount borrowed each year. Paying the interest in full keeps the balance level, and partial repayments slow the roll-up significantly, as the calculator shows.
Could I ever owe more than my home is worth?
No. Plans meeting Equity Release Council standards carry a no-negative-equity guarantee: when the property is sold and fees are paid, neither you nor your estate will owe more than the sale proceeds, even if the debt has rolled up above the property value.
What interest rate should I use?
Equity release rates are fixed for life (or capped if variable) under Council standards. In 2026 the lowest market rates were around 6.2% AER, with a market average near 7.2%. Your actual rate depends on the plan, your age and how much you release, so use a quote from a regulated adviser for precise figures.
Source: Equity Release Council – core product standards. Equity release is regulated by the Financial Conduct Authority (FCA). This tool is for illustration only; always take advice from a qualified equity release adviser before proceeding.