Building Societies or Banks

Required Reading


Building Societies or Banks

Now the major building societies who were prepared to lend on this basis included the Halifax, Bristol & West, National & Provincial, Woolwich, Alliance, Anglia, Britannia, Gateway and Cheltenham & Gloucester.

The rate of interest charged on these sorts of loan is generally higher than on a straightforward repayment mortgage. Most of the societies charge their endowment rate -that is, .25% to 0.5% above their 'base' rate. A few charge an extra 0.5% above that.

If you compare an endowment to a pension mortgage, two main factors stand out. The pension route is far more tax-efficient and offers better value because of this, but the figures involved are that much higher. Because of the rules on the amount that you can take as cash, compared to the amount you must take as pension, you must build up a total fund through the pension plan that is three to four times as high as the endowment result you're aiming for.

Table 18 shows an example of how this works. In the table it has been assumed that the borrower is aged 40 next birthday, a basic-rate taxpayer and taking out a mortgage of £125,000 over 25 years.

As you can see from the table, the monthly premium on the pension plan starts off at nearly one and three-quarter times the endowment premium (£172.99 gross compared to £143.25 gross). Because of the extra tax relief on the pension premium, however, the difference is whittled down so that the net figures are £151.10 compared to £136.76.

Want more informationoverseas mortgages

More on UK Pension mortgages

Secondly, once your savings are inside the pension plan, they suffer neither income nor capital gains tax -again, a big advantage over ordinary endowment policies where the life company pays tax at up to 0.375 on the income from its investments. lists all of the best Pension Mortgages. See:

Pensions can therefore be seen as supremely tax-efficient savings plans which can provide you with a large cash sum at retirement. Building societies have now come to realise that they can therefore provide an excellent way of paying off a mortgage.

Before the societies accepted this, however, they had to come to terms with one less fortunate aspect of pension plans: they are not assignable. In other words, you can't give away, or sell, your . . .... see: More on UK Pension mortgages

Current Mortgage Offers

  • At Commercialise Yourself you can compare mortgages using our repayment calculator, look for special offers for first time buyers or for 95% loan to value mortgages and see the most popular choices, Nationwide, Accord etc, we now even have a buy to let section for the brave or heart or strong of pocket! You can send us an email if you want to know more about mortgages and what we do and we will get back to you as soon as we are able.


    Finding the right mortgage can be stressful, but we’re here to help you every step of the way.

    Even if you have no proof of income, poor credit rating or facing repossession of your home, we can normally say YES (even if the high street lenders have said NO)!

    Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. The overall cost for comparison is 7.9% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but our average fee is 2.36% of the loan value. We are authorised and regulated by the Financial Services Authority for regulated mortgage and non-investment insurance contracts.