Mortgage News
'Pension mortgages coming back into fashion'
June 2006
Pension mortgages, in the light of 'A-day' (pension drawdown day), are beginning to look more attractive. People on high salaries once again have valid reasons for considering a pension-linked mortgage . A-day imposed higher limits on annual contributions. This means that high earners can make provision for pensions, and still save on their mortgages . Tax relief can be up to 40 per cent. Professionals such as solicitors, barristers and accountants could find pension mortgage loans a decent option.
Pension mortgages have faced major criticisms in the past, particularly during fluctuations in the stock market . One expert, from the Route Group, was reported as saying: 'It could be attractive to higher-end earners. In recent years there has been a shift away from investment-backed mortgages because of the volatility. But it is something we should be looking at. We just hadn't thought of it up to now. It is a very tax-efficient way of paying off a mortgage.'
Taking out a pension-linked loan could therefore come back into fashion. Brokers are currently not considering pension loans, but it could make sense to do so. Many mortgages are currently interest-only, and the FSA is now becoming concerned about how these are to be paid off. The appeal of pension-linked mortgages is in tax relief.
Source: Mortgages.co.uk
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© 2008 Michael J Alexander
Your home may be repossessed if you do not keep up repayments on your mortgage. Written quotations compliant with the Mortgage Conduct of Business (MCOB).
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