Does the description above sound right or am I missing something?
Can anyone advise me on the Tax benefits of using such a pension Mortgage option over the tracker I was considering.
Are there any drawbacks?
Can I pay off the mortgage interest in a shorter term lowering the interest?
what banks offer it?
Few points:gg66 said:Thanks everyone for your responses,
The property will be my Principle Private Residence. I've only come across the Pension Mortgage option late in the day as I need to get the Mortgage approved to get the builders in ASAP. How easy or difficult would it be to change from atracker to a pension mortgage say after one year? (potentially with a different provider)
Also, The property is also in a rural renewal area which means I can claim TFAs on the amount spent on refurbishment over the first 10 years. With this in mind I had intended paying any tax saved to reduce the capital on the mortgage or else to a pension fund if I was going for a pension mortgage. Is this the best approach?
I'll need to do some research on my own in terms of shortening the term of repayment (thus reducing the interest), providers etc. I'll post back here when I have more info.
Thanks again,
GG
Munsterdude said:Few points:
1) Cant be on your PDH - unless a portion of the house is your office - then a portion of the total mortgage can be turned into a pension mortgage
Munsterdude said:3) If you go the pension mortgage route - you cant reduce the term at all! The point being that the term of the mortgage has to match the pension. The mortage is to be paid off on retirement, when you recieve the proceeds of the pension.
Sorry! your private dwelling house (your main residence)gg66 said:Thanks Munsterdude,
PDH? sorry what's that? I'm not sure what you mean by this. Any enlightenment would be appreciated.
GG
EddieT said:Signed:
Nervous, confused and non-trusting (this is why I am resigned to posting this note on an Internet newsgroup, to a complete bunch of strangers)
Eddie - I think your independant financial advisor is trying to sell you an endowment mortgage. Not 100% sure of that, as I dont know if you are buying an investment property, or is the house you are purchasing for you to live in yourself?EddieT said:Hi, I am self-employed as well and about to move house. I have no choice but to take on a big mortgage so I went to "independent financial advisor". They recommended taking an interest-only mortgage and then a separate executive pension to cover the mortgage (he never mentioned a pension linked mortgage). The figures seem to add up based on 6% annual growth over 30 years. Questions are though: (1) are the charges higher than for a normal pension? (2) is this really the most tax effective way of purchasing the house? (3) what happens if I am forced back into a permanent position? (4) presumably the pension must be big enough so that 25% actually cover the mortgage? as this is the most I can get out at as a lump sum at the end of the 30 years? ......and I have to have this all done soon as time is running out.
Signed:
Nervous, confused and non-trusting (this is why I am resigned to posting this note on an Internet newsgroup, to a complete bunch of strangers)
Betsy Og said:I havent even read this topic or know too much re the area but if I felt like the above I definitely wouldnt be going into it. The mantra must be "If you want a quick answer its NO" - never go into something you dont fully understand.
Munsterdude said:Eddie - I think your independant financial advisor is trying to sell you an endowment mortgage. Not 100% sure of that, as I dont know if you are buying an investment property, or is the house you are purchasing for you to live in yourself?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?