Jeez, OP.
Please, please, do get out. You already know your situation is not normal. You might not quite yet grasp how far from normal it is. Many women live with kind, caring husbands who would never lay a finger on them, love seeing them happy and... well, love them, basically. That warm, fuzzy kind feeling you have for your kids? The whole 'would do anything to see them smile' kind of thing? Spouses feel that to one another too. A good man treats a partner with kindness. Gentleness.
You know you're in a hole. You know you've a journey ahead of you. You know he will play on your weaknesses to come back.
"No one else will want you."
"I'm the only one that understands you."
"You're mental, you're crazy."
"I'll take the kids from you"
Women's Aid should guide you as to the safest way to get you and your children out.
Your eldest hates him but doesn't even know he's not her father? Jeez, OP, come on... you've got to do something about that. Do it for her, if nothing else. She lives with a man she despises, thinks he's her father but isn't? How messed up must she feel already about men, and relationships, and what warm, happy marriages look like? You have to create a loving, nurturing environment for your kids, and that means he has to go. He's poison. They risk continuing the cycle. You've recognised you're in a cycle - now it's time to break it. It ends with you.