Can a change in interest rates impact how much you or your estate needs to pay in relation to the equity release?
This question tests whether your client truly understands one of the most important and often overlooked implications of equity release: how interest rates shape the final cost over time.
1. Make compound interest visual, not theoretical
Most clients don’t intuitively grasp compound interest. It’s not because they’re not smart, it’s because the impact builds quietly over time.
What to try:
Use simple visuals or analogies to show how even a 1% change in interest rates can snowball over 10, 15, or 20 years. For example:
“Imagine you borrowed £30,000 and the interest rate is 5%. After 15 years, the total owed could more than double. But if the rate had been 6%, it could be closer to £75,000 instead of £60,000. That’s how much of a difference 1% can make.”
Even a quick sketch or showing the lender’s example projections side-by-side at different rates can go a long way.
2. Anchor the discussion in their goals — and their legacy
Clients are far more likely to engage with the idea of interest rates if it’s linked to what matters to them — often, their estate and what they hope to leave behind.
What to try:
Connect the idea of rising interest rates to reduced inheritance or reduced flexibility in future:
“If rates rise and more interest rolls up, that could mean there’s less left for your family — or less borrowing power if you want to release more later. Understanding this helps you stay in control.”
This moves the conversation from abstract finance to personal impact — where it really resonates.
3. Pause and check for understanding
Even if you’ve explained it well, clients might hesitate to say “Yes” because they don’t feel confident they understood.
What to try:
Before moving on, pause and ask:
“Does that make sense so far? Would you like me to explain how the rate affects what’s eventually owed again in a different way?”
Better yet, ask them to explain it back to you in their own words. If they can, they’ll feel more confident — and more likely to answer the question correctly later.
In Summary
To help clients confidently answer “Yes” to whether interest rate changes can affect what they or their estate repays:
Make compound interest real with examples or visuals
Link the concept to their goals — especially legacy and future flexibility
Check for true understanding, not just polite nods