Supporting Children Financially With Repayment Possibilities

The client

• Name: Mr. & Mrs. Green*

• Aged: 60 & 58

• Working Couple

• Current house value: £500,000

• Require: £50,000

• Repayment plan required

Mr. and Mrs. Green's Story

Mr. and Mrs. Green are exploring options to financially support their son, Jack. He is getting ready to go to university, and keen to ensure a debt-free start to his career, Mr. and Mrs. Green are determined to help him avoid the burden of student loans.

Their property is valued at £500,000 and they have asked their later life mortgage adviser for information on equity release plans. The Greens have heard about managing compound interest rates through voluntary repayments and want to explore this further, as they’re not planning to retire for several years and are comfortable making regular payments while still in work. 

Optional Repayment Possibilities

Mr. and Mrs. Green are advised to make repayments while in work to reduce the interest on their loan accumulating. When they retire, they will have retained more equity in their property, which would make downsizing easier and protect any equity they wish to pass on to their children. With a Classic lifetime mortgage, the Greens can make a maximum of 12 payments, up to 10% of the initial release per year, ERC-free. 

Managing Their Lifetime Mortgage with MyPure

Mr. and Mrs. Green can manage their lifetime mortgage online through the account management platform, MyPure. They can view their account balance, make one-off optional repayments, and access a bank of FAQs to support them along the lifetime mortgage journey. 

Mr. and Mrs. Green are advised to take a Classic lifetime mortgage from Pure Retirement.

• They release £50,000 at 5.83% interest to pay for their son’s university.

• The couple opt to repay £292 per month. (This is an example, as interest accumulates over time, the monthly payment may differ.)

• The Greens can pay up to £5,000 in ERC-free repayments per year. 

*Client names have been changed to provide anonymity. We cannot give any assurances that applications outside our lending criteria will be approved.