As far as I know there is no group discount, neither for Eurail nor for Interrail.

As you all live in the UK you should all buy an Interrail pass with UK as the country of residence, but as you have a Malaysian passport no one will question if you buy a Eurail pass. 

You need to bring something to prove your residency in the UK if you buy in Interrail pass with UK as country of residence. 

If you plan to travel with the Eurostar from the UK please be aware of that is a limited number of pass holder seats on the Eurostar and on popular departures and during high season those sell out weeks, and sometimes months in advance.

The best place to see the availability of passholder seats and make reservations on the Eurostar is 

https://www.b-europe.com/EN/Booking/Pass#TravelWish

Press "later trains" and eventually you will find the next available connection. 

If you have a mobile pass you need to generate a Pass Cover Number in order to make the reservation at b-europe. You do that here in the PCN generator:

https://community.eurail.com/news-and-announcements-39/pass-cover-number-generator-is-live-5653

As UK does not issue any recognised residence photo ID it will probably be simpler for the 3 of you to purchase passes linked to your home countries/passport, this will also have the advantage of having no restrictions on UK travel days.

I hadn’t realised that you would need photo ID for proof of residence, but rather any formal form of document showing a UK address and a right to reside. This would not be a travel document as you would still need your passport to cross borders, simply a document to support your using an Interrail pass in your passport country in an unlimited way, if ever challenged.

That is also my understanding.

I never said it was needed, just that it was simpler to have passport and interrail/eurail country match.

It is certainly the case that officials from some countries where residence IDs are standard have difficulty understanding that this is not a universal thing, it is always a good idea to have things look correct so there are less questions to answer and no anomalies for anyone looking for a reason to be difficult over.

It is also important to understand that a residence card is usually not an ID. It is just what it says: it proves where you live (and not who you are).