What is Tailored Interest Reward?

Tailored Interest Reward is an innovative lifetime mortgage designed to give your clients more control over their borrowing costs.

Whether lump sum or drawdown, it allows customers to tailor their monthly payment to their circumstances; with interest rate discounts up to 0.65%, no fixed term and only a part-interest payment required to secure the maximum discount.

Adviser Guide     

Create KFI

Tailored Interest Reward overview

Ages 55 - 85


Adviser guide

LTVs from 11% - 58.4%


Product guide

£100,000+


Product info
 

Lump sum & drawdown


Lending criteria
 

Who is Tailored Interest Reward for?

Your client could be suitable for Tailored Interest Reward if they’re willing and able to make monthly payments to secure a lower interest rate. It could also provide a good customer outcome for customers who want to reduce their monthly outgoings by paying off an existing mortgage, or if they want to extend their existing mortgage debt into retirement and choose how much and for how long they make mortgage payments. 

Find out more about who is and isn’t suitable for Tailored Interest Reward by downloading our Product Information Sheet.

Product Information Sheet - Lump Sum

 Product Information Sheet - Drawdown

How much could my client save?

While making monthly interest payments, as a reward for paying more than 25% of the monthly interest, customers secure their plan’s maximum discount, which ranges from 0.3% on Tailored C3 to 0.65% on Tailored C8.

View LTVs

Case study example

Paul (71) and Dawn (69) have lived in their £450,000 family home for over 30 years. With an outstanding £165,000 interest-only mortgage coming to an end, they wanted a way to repay the balance while remaining in the home they love. Looking for a flexible solution, they explored equity release and their adviser highlighted that Tailored Interest Reward could be the perfect fit.

By making payments for 10 years through Tailored Interest Reward, Paul and Dawn save almost £30,000 in interest compared to making the same payments voluntarily on Tailored Lifetime, and over £72,000 compared to not making any payments at all. As a result, they can pass on nearly £200,000 in remaining property equity to their family when their plan ends—more than double what they would if they made no payments.

How is Tailored Interest Reward different?

Unlike some other Interest Reward plans, Tailored Interest Reward comes with no fixed term. The customer is rewarded with an interest rate discount for as long as they make payments. For example, if your client wanted to pay more than 25% of their plan’s monthly interest for 10 years, they’d receive the maximum discount available for 10 years. When the payments stop, the interest rate reverts to the non-discounted rate.

You can see some of the other areas it differs below. 

Is Tailored Interest Reward affordability tested? 

You're expected to conduct an affordability assessment before recommending Tailored Interest Reward to ensure it's affordable. That includes assessing the affordability of payments against the full facility at the point of initial advance in the case of a drawdown. However, we won't assess your client's credit score, and their home won't be repossessed if they have to stop making payments.

You can download our income and expenditure template to help when conducting an affordability assessment with your client, or use one of the many helpful online tools, such as Air’s Navigator Tool.

Download template

What if my client misses a payment?

If any part of a payment is missed and not repaid within 30 days of the original payment date, this is classed as a missed payment. A customer can miss a maximum of two monthly payments in each 12-month period after completion to retain their discount. Please note, any unpaid interest will be added to the loan amount and compounded, increasing the amount owed.

If more than two payments are missed, the customer will lose their interest rate discount and the lifetime mortgage will switch to a full roll-up of interest basis for the remainder of the term. The interest rate applicable to the loan will revert to the rate at the time of completion prior to any discount. A new grace period starts every 12 months after completion.

Payment holiday

It’s important to ensure your client is willing and able to make regular payments. But we understand circumstances can change. To help with this, your client can take one payment holiday of up to three consecutive months every 12 months after completion, provided they give us one month’s notice.

Reducing payments

Your client can temporarily reduce their monthly payments at any time to help manage budgeting. Alternatively, they can take a payment break during their payment term. In both instances, the above rules must be followed to retain the full discount.

Stopping payments

If your client needs or wants to stop making payments, they can. The lifetime mortgage will switch to a full roll-up of interest basis for the remainder of the term and the discount will be removed. This won’t affect their security of tenure, however.

Sourcing

Currently, Tailored Interest Reward is only available through more2life’s fastpath portal and Air Sourcing, with plans to expand this in the near future.

For more information on how to source Tailored Interest Reward, download our fastpath and Air Sourcing guides below.

Air Sourcing guide

fastpath sourcing guide

Lending criteria tool

Tailored offers flexible product criteria. For more details and to compare it with our other plans, try our free lending criteria tool. It answers common product criteria questions and allows you to personalise your search to check if your client’s home is eligible.

Lending criteria tool

Download your Tailored collateral now

Tailored IR Adviser Guide

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Lending criteria

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Product guide

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Customer guide

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Tariff of charges

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Product information: lump sum

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Product information: drawdown

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Tailored IR short guide

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Launch video

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FAQs

As a reward for paying more than 25% of the monthly interest, customers secure their plan’s maximum discount, which ranges from 0.3% MER on Tailored C3 to 0.65% MER on Tailored C8.

Download adviser guide

With Tailored Interest Reward, there’s no defined payment term; so, your client can stop making payments at any time. If your client misses three monthly payments within a 12-month period following completion, the interest rate discount will be removed.

However, as Tailored Interest Reward is a lifetime mortgage that meets Equity Release Council standards, your client will still have guarantee of tenure if they stop making payments.

Your client can make payments for as long as they wish. As long as they pay more than 25% of the monthly interest, they're rewarded with a discount to their interest rate. Then if they stop making payments, the discount is removed and the rate reverts to the originial rate at completion prior to any discount. Download our Adviser Guide to learn more. 

Download now

No. Even if your client stops making payments, this won't put their home at risk. Tailored Interest Reward is a lifetime mortgage that meets Equity Release Council standards. 

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