Interest servicing

Their Home, Their Equity, Their Way

Empower your clients to borrow their way with an interest serviced lifetime mortgage*, available on both lump sum and drawdown plans.

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*Interest servicing with Pure Retirement meets the Equity Release Council's core product standards for lifetime mortgages.

How interest servicing works

The interest servicing option can be selected when applying for an initial loan, and an interest rate discount will apply for customers making monthly payments of at least 25% of the monthly interest. After the lifetime mortgage has been set up, the monthly payment amount can't be changed; customers can choose to stop payments at any time.

Illustrative example:

Release amount: £50,000

With roll-up

Interest rate: 7.50% MER

Monthly payments: £0

Amount owed after 15 years: £153,473

Savings over full interest roll-up: £0

With interest servicing

Interest rate: 7.00% MER

Monthly payments: £72.92

Amount owed after 15 years: £119,334

Savings over full interest roll-up: £21,013*

* if the 25% payments maintained

Release amount: £50,000	Interest rate	Monthly payments	Amount owed after 15 years	Savings over full interest roll-up
Full interest roll-up	7.50% MER	£0	£153,473	£0
25% monthly payment (min)	7.00% MER (0.50% discount)	£72.92	£119,334	£21,013
50% monthly payment	7.00% MER (0.50% discount)	£145.84	£96,222	£31,000
75% monthly payment	7.00% MER (0.50% discount)	£218.76	£73,109	£40,987
100% monthly payment (max)	7.00% MER (0.50% discount)	£291.67	£50,000	£50,973

*Interest serviced example based on a £50,000 loan with 0.50% interest servicing discount over an estimated 15-year term. Prices and discounts are illustrative only, actual prices available on sourcing platforms.

Interest servicing is currently available on our Emerald and Heritage range. Interest servicing customers can take up to three monthly payment holidays in every 12-month period. If they miss more than this the interest rate will increase as the discount no longer applies. For further information on product features, click the link below to view the full plans.

Explore lifetime mortgages

Interest serviced calculator

We've developed a universal lifetime mortgage calculator to help you illustrate how interest servicing works. This can be used with data from any sourcing platform. We'll keep you informed on version updates and usage tips.

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What are the benefits of an interest serviced lifetime mortgage?

By servicing the interest each month, customers not only benefit from discounted interest rates but also a reduction in the total cost of borrowing.

Interest rate discounts available
Available on lump sum and drawdown lifetime mortgages
Option to service the interest on additional borrowing
ERC-free optional partial repayments of up to 12% each year on Emerald, in addition to the monthly payments
ERC-free optional partial repayments of up to 10% available on Heritage, but only after interest servicing monthly payments have ceased
Three monthly payment holidays in every 12-month period
Full visibility of their plan and payments with MyPure
Offering the same great lending criteria

Interest servicing with Pure Retirement meets the Equity Release Council's core product standards for lifetime mortgages.

Payments

How should my client take a payment holiday or stop their monthly payments?

Clients may not realise that rejected Direct Debits can lead to bank charges and rejected payments showing on their bank statement. If they want to take a payment holiday, or stop their payments altogether, the best approach is for them to contact Pure Retirement. This ensures changes are made to the Direct Debit to minimise any potential impact with their bank.

Please note: any unpaid interest from missed payments or payment holidays is added to the loan and rolled up.

Thoughts from our Chair

We brought this lifetime mortgage to the market to provide your customers with even more options, should they be able to make regular payments to their lifetime mortgage plan.