Paying for care: Deferred Payment Agreements
How much it will cost
The deferred payment amount will have compound interest added to it.
Compound interest is interest that applies to both the amount you have borrowed and the amount of interest that has already grown during the agreement. You can think of it as "interest on interest".
This means it will grow more quickly than "simple interest" would on the amount borrowed alone.
The Council will follow the interest rate set by Central Government, which is adjusted in January and July each year.
We will provide you with a statement each year to tell you how much is owed and the cost of repaying the debt.
The interest will add up in a compound way, calculated every three months.
You can, however, ask the Council to let you pay the interest separately on an ongoing basis, to avoid it growing and being compounded.
An administration fee is also charged at the start of the agreement.
This covers the cost of drawing up the legal documents and registering the legal charge at the Land Registry.
The cost can be paid at the start of the deferred payment agreement or can be added to the loan.
Interest will be charged on the administration fee if it is added to the loan.
More administration fees apply at the end of the agreement, to cover other legal costs.
If you still have a mortgage for the property, you will need to keep paying that too.