Equity release lets homeowners unlock cash from their property without selling it, but interest usually compounds annually with no monthly repayments — so the debt grows quietly in the background and a relatively modest drawdown can more than double within a couple of decades.
This calculator shows the projected total debt at the end of each year based on the drawdowns and rates you enter. Use the tabs to examine each drawdown individually, or view the combined total. The dark line on the chart shows what was actually borrowed — everything above it is interest.
Most lifetime mortgages — the most common form of equity release — are designed to be repaid in full, usually from the sale of the property, when you die or move into long-term care, rather than through monthly instalments. Because nothing is chipping away at the balance in the meantime, the interest that would normally be paid off each month is instead added to what you owe, and next year's interest is then calculated on that larger balance. Some products let you pay some or all of the interest as you go to slow this growth; this calculator assumes the roll-up (no-repayment) version, since that's the default most equity release plans start from.
For each drawdown, the calculator applies your entered interest rate once per full year elapsed since that drawdown started, compounding annually: balance = amount × (1 + rate)years. It doesn't account for partial months within a year, fees, or product-specific charging structures — real lender statements may compound monthly or use a different day-count convention, so treat the year-by-year figures here as a close approximation rather than an exact match to your paperwork.
This tool projects how an existing or planned drawdown grows over time. If you want to estimate how much equity you could release in the first place, based on your age and property value, see our equity release amount calculator.
Equity release products and how lifetime mortgage interest rolls up are explained in more detail in MoneyHelper's lifetime mortgage guide — MoneyHelper is the UK's government-backed, impartial money guidance service (part of the Money and Pensions Service). This calculator is not financial advice; speak to an independent, FCA-regulated adviser before making decisions about equity release.