Which mortgage to choose - Paying off your mortgage

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Which mortgage to choose - Paying off your mortgage


That is the bird in the hand that a repayment mortgage provides you with. It's not a massive sum of money (and under a gross profile type of repayment mortgage it is even less -around £11,053), but it can help: particularly when you bear in mind that the second move you make will cost proportionately more than your first as you will have the costs of selling as well as buying. Figure 2 opposite shows the situation in graphic form.

Which.co.uk are a good source of deciding which mortgage is right for you: http://www.which.co.uk/money/mortgages-and-property/guides/how-to-get-the-best-mortgage-deal/

The second factor to consider in the 'middle bit' of the mortgage is the level of mortgage interest rates in the future. With repayment mortgages, as we have seen, you can in the last resort apply to extend your mortgage term if you're having trouble meeting the increased repayments. Effectively you can't do that with an endowment mortgage, and so you would be giving up that bit of flexibility by choosing that route.

But let's look on the brighter side. Suppose that you see yourself, not as someone who is going to find it difficult to make ends meet in the future, but as one who is going to get steadily more successful and be firmly lodged in the higher-rate tax bands before you know it.

In that case, the endowment route will provide you with better value for money, because the interest on the loan qualifies for full tax relief, so that the net cost of the mortgage will be lower than on a repayment basis. Assuming a mortgage over 25 years at a base mortgage rate of 11.25% as before, the relative costs per £11,000 for higher-rate taxpayers are as follows:

Not only are the immediate costs lower, but the money that the life company is investing for you via the endowment policy is going to be taxed at a lower rate than you would suffer by investing it directly.


Looking for a 10 percent mortgages

Which mortgage to choose? Pay now pay later


A man who claimed to be able to forecast the future by the stars was once asked 'Well, tell me who's going to be the winner in the 3.3 at Doncaster this Saturday' and he said he couldn't.

Accused of being a fake, he explained that he'd have to cast horoscopes of all the horses, all the riders, all the trainers, owners, punters even then he wouldn't be sure he'd taken every material fact into account, or how to weight the results.

We're really in much the same position with endowment policies. The range of knowledge that you would have to have would be so vast that, even if you could see into the future, to all intents and purposes it would be impossible . . .... see: Which mortgage to choose? Pay now pay later


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. offers@commercialise.org.uk

     

    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.