lifetime mortgage

altyblue

my mother signed under coercion from my deceased father a life time mortgage in 2009. my brother and i were not aware at the time. paying 6.9% compound interest the amount owed is now nearly the same as the value of the property. how can 6.9% compound interest since 2009 be in any way deemed as fair?

ACG

The bank of england base rate was 5% in 2009. 2% above base rate on a specialist type of mortgage lending I dont think is unreasonable. It is probably around 6-7% now, and the base rate is similar. 

I dont do lifetime mortgages so I have no investment in this but the rates seem broadly in line with what is available today. 

dunstonh

 how can 6.9% compound interest since 2009 be in any way deemed as fair?

Very easily. The rate is in line with expectations.

 the amount owed is now nearly the same as the value of the property. 

The problem with long term equity release is that the debt rolls up and when property values fall or remain static for a long period, then the ratio of debt to value will get closer.

Most equity release schemes have a no negative equity clause though.   

Hoenir

Your parents benefited from the equity released. That's their prerogative.